Over time, as technology has become a greater part of business operations, IT budgets have continued to grow, with small to mid-size companies generally outspending larger organizations when allocating dollars for technology investment. According to the State of the CIO report, the average small business (less than $50 million in yearly revenue) is investing 6.9% of their total annual budget on technology. Regardless of the actual dollars spent, the goal of any organization is to make wise and judicious decisions when planning IT expenditures. Like a project plan or IT roadmap, your IT budget provides direction and a holistic view of your department and its funding requirements. It lets you quickly determine whether resources are over committed in one area or another, and in the case of department-level IT budgets, lets you compare what you’re spending versus similar departments.
In order to produce a reliable IT budget, it’s critical that your organization lay out an IT investment strategy that aligns with the specific short and long-term goals of your organization. Aligning these goals with the basic budgeting priorities that lay in front of you can be a challenge; here are suggested steps to keep in mind throughout the process. These steps will help you determine the best technology investments for the near-term, (we have a few suggestions), as well as keep your long-term investment strategy front and center.