We’re headed for 2025, and it’s time to consider technology spending for the next year. How will you know the best allocation of your technology dollars? Read on to learn about how to align your tech budget with your business goals.
Getting Started with IT Budget Alignment
A LinkedIn article presents steps to follow in planning your IT budget. A good first step is understanding your overall business goals. What do you want to accomplish in the next year, and beyond? Broad goal categories include upgrading existing systems, reallocating spending to more critical areas, and investing in new technology. How will you use trends in technology–automation using artificial intelligence, for instance–to improve processes? Your company’s goals will be unique to you, and need to be prioritized according to what’s most vital.
Artificial intelligence offers great potential for increasing efficiency for your company. On the customer service front, it can automate processes like virtual chat, allowing conversational AI to handle routine questions and free up representatives for more complex tasks. Data analysis is streamlined and can efficiently provide insights. Network monitoring is improved, with automation allowing constant scans and identifying possible problems. Email messages are sorted, hence removing spam and forwarding the most important messages to the proper recipients.
Assessing Your Current IT Spending
What is the state of your current technological ecosystem? Are you overspending on areas you don’t need to, and underspending in more important areas? What does each element of your technology contribute to business objectives? For example, you might need to move some systems and data to the cloud for greater flexibility and reduced costs. Do legacy systems you maintain still add value relative to what you spend? Answering these and other questions gives you a clear picture on where you need to focus technology dollars.
The Role of Cybersecurity in Your Technology Budget
According to a LinkedIn article analyzing Forrester’s cybersecurity spending benchmarks, the average percentage of cybersecurity spending is only 5.7% of annual IT spend. Rather than being just a part of the IT department, spending on cybersecurity should be a decision made by the business as a whole. Ideally, spending on cybersecurity will be with a view toward proactive rather than reactive defense. Categories of spending include:
- Processes like audits and cybersecurity measures
- Technological tools including software purchases and network monitoring, and some outsourcing to third parties for businesses without an in-house IT team
- Employee cybersecurity training
Once you have a clear picture of what you want to change, prioritize according to business objectives, such as improving customer experience, enhancing operational efficiency, or even driving innovation. Perhaps you want to increase efficiency in operations, which could involve using AI for automation of certain processes.
Next Steps to Take
Communicate with Stakeholders
After setting priorities, communicate with and engage your stakeholders. They likely will have valuable input that you may not have thought of. Department heads, executives and end users inside and outside the business can tell you if any current initiatives are not meeting needs. End users can tell you how technology you’ve adopted makes their job easier and improves experience. Department heads and executives can inform you about what is working and what isn’t. Keeping lines of communication open lets everyone know you value input and will use this input to align the tech budget with their needs.
Tracking and Fine-Tuning Your Progress
To keep track of your progress in alignment of IT spend, establishing KPIs (key performance indicators) as benchmarks for how IT projects contribute to broad goals will help make these goals measurable. Examples of KPIs include how much a certain IT initiative contributes to growth in revenue or promotes greater operational efficiency. How might adopting AI help automate tasks translate to how many minutes are saved through automation
Alignment doesn’t end when an IT budget is drawn up. Rather, it’s a continuous reassessment–obtaining feedback, analyzing it, and acting on it. Having a plan and being able to follow it will help you navigate changes in business priorities, market conditions or technology advancements. Then you can be agile and change spending priorities to drive your business where you want it to go.
Any new technology adopted should aid your business strategy and goals. For further guidance, contact your trusted technology advisor today.