Financial management in any business is crucial to ensure correct allocation of costs, budgets and other financial responsibilities that could affect the success of a company. The IT department usually has a big role to play in financial obligations. If you’re suddenly realizing that you’re going over budget or spending too much on the technological side of things, it might be a good idea to review your costs and investigate how you can control your IT budget and expenses in the long run.
Depending on how much technology, software and equipment your business relies on, the IT department can always benefit from a financial overview and new budget allocation decisions every year.
Tips to Help Control IT Budgets and Expenses
Here are some helpful tips for you to take charge of your IT department spending that will benefit your company and your team.
1. Review your budget monthly
Reviewing your budget monthly and keeping track of where you are overspending and underspending will help you create a more accurate budget for next year. Looking over your budgets on a monthly basis will also help you stay organized and enable you to catch any errors quickly rather than when it’s too late. The business climate and technology are constantly evolving, so keeping a consistent eye on your expenses will help you control any anomalies in department spending.
2. Strategize on cybersecurity
With the rise of employees working from home, it’s imperative now more than ever to improve your cybersecurity game. CSO online states that, “US organizations face the highest costs with an average of $8.19 million per breach – up 5.3% on 2019.” A data breach can often cost a business not only the consequences from the breach but also financial costs of fines, redemption fees and other obligations that occur. Make sure to have a good infrastructure in place to help you avoid a serious breach and invest in the updates whenever needed. This investment is worth a lot more than the costs that come with a breach.
3. Audit your software
Have you looked into ALL the various software the entire company is using? Oftentimes, most of the software licenses keeps getting renewed but might be going unused. Take some time to go through all the licenses and figure out which ones are actually benefiting the company and are an asset to the organization. Cut costs but removing the ones that are obsolete or not needed anymore especially if your company has gone through a change in workflow or processes used.
4. Take inventory of IT equipment
Round up all your IT inventory and keep track of how old items are and what might need an upgrade every couple of years. Desktops and laptops can last many years, however, depending on how data and storage-heavy projects are, older equipment can often become slow which leads to lower employee productivity. Maintain a database or spreadsheet with all the company’s equipment and create a forecast with costs and expenses when upgrades are due. Some equipment doesn’t need to be updated as often and this is where you can potentially cut or reserve costs.
5. Align the budget with overall business strategy
Keep all your team members and employees in the know regarding your budget and future expenses. While you might have a solid IT budget in hand, it’s important to also look at the overall business strategy to make sure that these costs and expenses align with the overall strategic and financial goals of the organization. This will be helpful in ensuring that the financial decisions are aligned with all the managers and will not hinder the overall goals and decision making.
Be proactive in managing your expenses and keeping your costs in check. Investing in technology is expensive but as the world becomes more digital, it’s important to have a secure and solid infrastructure in place. While this requires you to spend money, making smart decisions will help you make wise spending decisions.