6 Smart strategies for determining your IT budget for 2020

January 8th, 2020

With technological development moving at a break-neck pace, many small businesses are having a hard time keeping up. Yet to become more adaptable to change, they also need to choose the right solutions and get their technology budgets under control. At the same time, every business faces a constant threat from the rising tide of cyberattacks, which eats into a huge chunk of the business’s IT budget.

With these seemingly polarizing demands, here are six approaches every business leader needs to consider when formulating an IT budget:

#1. Invest in your developers

Every business has unique needs, and they can’t always be met by off-the-shelf solutions. For example, more and more businesses are investing in mobile apps for their customers. Others need to integrate existing systems and data with newer services to enable future growth. A common mistake is to outsource software development to an overseas team of developers whose labor may be more affordable, but who might not be sufficiently familiar with the challenges of implementing security, compliance, and privacy on demand. It’s time for things to change as the importance of local expertise continues to grow.

#2. Choose subscription-based services

Business leaders relying on in-house systems are forced to invest in costly upgrades because of rapid technological obsolescence. That’s one of the most common reasons smaller companies are moving their operations over to the cloud. This gives them access to the data storage and computing power they need on demand, so they only pay for what they use. A service-based infrastructure is also far easier to budget for, since you can retain full visibility into ongoing costs and reduce the risk of unforeseen expenses.

#3. Secure mission-critical systems

It’s never been more important to invest in privacy and security by design when implementing any new technology. This should always be a top focus area when planning IT budgets since the financial and other risks of getting it wrong will only incur extra costs. IT budgets must cover every possible contingency by incorporating risk assessments, impact analyses, and business continuity planning. Taking a more proactive approach to security will also reduce the burden of unpredictable expenses associated with reactive support and remediation.

#4. Prioritize user experience

Product and pricing have long been the two main focus areas when building a brand. But the way customers interact with a business, typically through technology, is now one of the most important differentiators. The same applies to employees, whom you can think of as internal customers. If the user experience isn’t up to scratch, adoption rates will be low, and users will likely rely on risky workarounds instead. By putting user experience first, you can ensure your technology investments don’t go to waste.

#5. Look for integrated solutions

Business technology isn’t an area where you can afford to cut corners. When budgeting for IT development, you need to start by looking at what you already have. For example, if you’re thinking of migrating a business process over to the cloud, you’ll need to ensure it’s a good fit. Some legacy systems are harder to migrate than others, and in some cases, it might prove to be prohibitively costly. It’s important to consider the costs and potential complications of any such change and prioritize accordingly. It’s also wise to be wary of IT vendors who aren’t prepared to help you integrate existing infrastructure and instead want you to start over and, in doing so, spend a lot more money.

#6. Align IT with business needs

The success of any digital transformation depends heavily on the alignment between technology and business needs. That’s why every IT budget should start with a needs assessment, which identifies a clear need for a new system before looking at the options for delivering upon it. By aligning IT with business needs and goals, you’ll have a foundation upon which to establish a realistic budget and prioritize effectively.

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