It's 2020 IT budget planning season. Since none of us has a crystal ball to enlighten us as to what might happen in the next 12 to 18 months, we wanted to share some tips to make this process easier.
While you start the budget process, consider thinking about next year differently. Take a strategic approach by answering these six questions:
- Are your IT priorities aligned with your business objectives? For years, the conventional approach to IT budgeting involved working almost exclusively with the IT team to prioritize spending for hardware and software. That’s no longer efficient. Today, you need an interdepartmental process to gather input from stakeholders in every department to ensure that IT investments support business initiatives. For example, if HR plans to launch a new employee platform, IT needs to understand how this might put them at risk and what infrastructure needs to be in place to support it.
- Is security adequately funded? We all know security is top of mind. The financial consequences of data breaches and malware attacks can be devastating. Take the time to re-evaluate your needs around security by laying out what points of entry a hacker might exploit. A free Security Posture Assessment from RMM Solutions will give you a clearer view of your potential vulnerabilities.
- What emerging trends will impact your IT requirements? Digital transformation remains a high priority for organizations looking to improve productivity and efficiency, streamline operations and control costs. Studies show most organizations are looking to achieve these goals through increased automation and better data analytics.
- Are you compliant? Organizations of all sizes are facing new regulatory compliance requirements. In fact, Wisconsin is considering new privacy laws that will impact all of us if passed. Imagine GDPR going into effect for your business — how would this impact your IT infrastructure? Compliance requirements directly affect IT strategies for data protection, risk management, records management, financial reporting and more.
- Are you using a CapEx or OpEx financing model? Given the rapidly changing nature of technology, it often makes more sense to acquire IT resources for a monthly fee (OpEx) rather than purchase them outright (CapEx). This not only creates budget flexibility but provides a hedge against the risk of IT purchases that prove to be inadequate or ineffective. Cloud-based technology-as-a-service solutions and traditional equipment leasing models are effective ways to shift to a pay-as-you-go OpEx approach.
- Are you fully capturing tax benefits? Since 2017, Section 179 of the IRS Code allows business to deduct the full purchase price of qualifying equipment or software in a single year rather than depreciating these assets over a longer period. It’s an incentive meant to encourage businesses to buy equipment and invest in themselves.
Business technology requirements have changed dramatically in the past few years, and those changes should be reflected in the IT budgeting process. Budgets should no longer be entirely focused on individual line items but rather on a holistic view of how technology drives business benefits. Rather than a necessary annual process, IT budgeting can become a strategic exercise in creating operational efficiency. We invite you to watch our recent webinar to further examine how the budgeting process can drive a range of business improvements.