January is a wonderful time for an IT budget.
Everything is organized. Everything is approved. You know exactly what technology will cost for the next 12 months.
Or so you think.
Then summer rolls around. Four laptops have died, you’ve hired three new people, cloud storage costs have crept up, and your software renewals somehow cost 20% more.
That’s usually when someone asks:
“Why didn’t we know about this?”
It’s not my favorite question, because the answer is usually:
We did. Or at least, we could have.
Most “surprise” IT expenses aren’t really surprises. You can see many of them coming months—or even years—ahead.
Here are four budgeting mistakes that turn predictable technology expenses into unpleasant invoices.
1. You’re budgeting with the rearview mirror
A common way to build next year’s IT budget is to look at what you spent last year and use roughly the same number.
It’s easy. It’s also not really forecasting.
Last year’s spending tells you where you’ve been, not where you’re going.
A useful IT budget looks ahead. Which computers are getting old? What software renewals are coming? Are you hiring? Expanding? Opening another location? Changing how people work?
Your old budget is a good starting point.
Just don’t mistake the rearview mirror for the windshield.
2. “It still works” is your replacement strategy
Every office has that computer.
The fan sounds like a small aircraft. The battery lasts approximately seven minutes. Opening a spreadsheet gives you enough time to get coffee.
But technically…
“It still works.”
That’s a pretty low bar for something your employee needs eight hours a day.
Computers age. Waiting until one completely dies turns a predictable replacement into an emergency purchase—and emergency purchases rarely come with great prices or plenty of options.
Know the age and condition of your equipment and budget for replacements before somebody is staring at a black screen on Monday morning.
3. Your renewals are on autopilot
Auto-renew is convenient.
It’s also how businesses end up paying for software nobody remembers buying.
Subscriptions change. Prices increase. Employees leave. Business needs change.
Before a renewal hits, ask a few simple questions: Do we still need this? Who’s using it? Are we paying for the right number of licenses? Is there a better option?
Put major renewals on the calendar and review them before the charge appears.
You may discover you’re still paying for an account belonging to someone who left two years ago.
I’m sure they appreciate it.
4. Your growth plan and IT budget have never met
Leadership has a meeting about next year’s growth plan.
IT has another meeting about next year’s technology plan.
Eventually, those two plans meet.
Usually on an invoice.
Hiring employees, expanding locations, adding remote workers or introducing new services all have technology costs attached to them. There’s equipment, software, security, support and infrastructure to consider.
If your IT team or IT partner knows where the business is headed, they can help you figure out what technology you’ll need—and what it’s likely to cost—before you get there.
Your business plan and technology plan should be having the same conversation.
A good IT budget should be boring
I mean that as a compliment.
You don’t want excitement from your IT budget. You want predictable expenses, planned replacements and very few moments where someone says, “Wait…how much?”
You can’t predict everything.
But when you account for aging equipment, renewals, security needs and business growth, you can eliminate a lot of those supposedly unexpected expenses.
What’s hiding in your IT forecast?
A good IT budget won’t magically predict the future.
But it should dramatically reduce the number of times you have to say, “Well, I didn’t see that coming.”
Want a clearer picture of what your technology expenses could look like next year? Schedule a 10-minute discovery call and let’s take a look at what may be coming.
