Organizations of all shapes and sizes often struggle when it comes to IT budgeting. This tends to happen simply because IT teams themselves don’t fully understand the budgeting process, and the finance teams don’t fully understand the needs of the IT team, thus resulting in a circle of confusion and mismanagement.
Fortunately, you can put a stop to this cycle by knowing the right questions to ask so that your organization can more effectively budget and implement technology decisions that will serve to benefit all. So, here are five crucial things to consider when planning your IT budget:
- Do your business plans seek to employ the potential of technology for advancement? If you’re truly seeking to boost the operating performance of your business, your strategy should ultimately assess both opportunities and threats so that you have a clear understanding of how you can use information technology, in the long-run, to beat the competition, taking advantage of emerging opportunities and trouble-shooting potential obstacles. The fact is, technology can drive revenue, reduce costs, and lower risk. So, think long-term, and seize these opportunities to minimize threats for overall improvement across all sectors.
- How is IT changing industry competition? Technology is being used to reinvent the customer experience. So, not only is it important to know who your competition is from a business standpoint, it’s also important to keep track of your emerging and existing competitors to see how they’re taking advantage of technology. This way, you can see how your IT is stacking up and how it’s helping you further your success and goals, as well as how it’s helping your organization transition into new markets.
- How will IT improve strategic and operational coordination? The best companies continually use IT to streamline their process and improve business agility. And, to be a leader, you need to manage and measure both business and IT agility. This includes doing things like improving data quality, optimizing the IT delivery processes, changing the systems landscape, and building overall flexibility. These actions will ensure that your organization is operating on a higher level.
- Are you able to use IT effectively? IT has no value if you’re organization doesn’t have the capabilities required to deliver it. In order for (the right) technology to present any value, it must be used in conjunction with the right skills, a clear strategy, high-quality data, and streamlined processes. So, thorough assessments need to be carried out to determine whether or not your organization even possesses the capabilities to derive value from any IT changes as well as be able to target places for improvement.
- Are you comfortable with your level of IT risk? These days, cybersecurity is a huge IT issue, though most business leaders, whose companies have experienced a security breach, don’t have a clear understanding of the risks in the first place. It is for this reason that organizations require a comprehensive system for managing IT risk. A thoroughly laid out, comprehensive IT budget strategy will aid in this, as it will help mitigate risks and prevent security breaches. From the top of the chain to the bottom, a business needs to understand the full range of threats that they’re facing so that you can address the root cause(s).
Technology is ultimately an operations investment that ensures the smooth flow of your organization. It is an absolutely essential part of your business, and with proper IT budgeting, you will have the ability to remain a competitive force in your industry.