Many companies use this time of year to start budgeting and planning for the upcoming year, and IT and telecom budgeting should be a top priority. A well-structured IT and telecom budget aligns with the specific needs, goals, and anticipated growth of the business while managing risks. Here’s what an effective IT and telecom budget should include:
- Fixed Costs (Recurring Expenses)
These are essential, ongoing operational costs that the company incurs regularly (monthly or annually):
- Telecom services: Costs for voice, data, internet services, and mobile plans.
- Cloud services: Subscription fees for cloud storage, computing power, and platforms like Amazon Web Services (AWS), Microsoft Azure, or Google Cloud.
- Software licenses: Regular fees for company software (e.g., Microsoft Office, CRM systems, ERP).
- Support contracts: Ongoing maintenance agreements for hardware and software.
- Hardware and Infrastructure
This category covers acquiring, maintaining, or replacing physical assets, such as:
- Telecom equipment: Phones, routers, modems, and other communication devices.
- Servers and storage: On-premise servers, storage systems, and network infrastructure.
- Workstations and laptops: Computers and mobile devices for employees.
- Networking equipment: Switches, firewalls, routers, etc.
- Security
With increasing cybersecurity threats, businesses must invest in protecting their systems. This includes:
- Security software: Firewalls, antivirus, encryption, and intrusion detection systems.
- Compliance tools: Tools to meet industry regulations like GDPR, HIPAA, etc.
- Monitoring services: Continuous monitoring of networks and devices to detect and prevent breaches.
- Disaster recovery and backups: Solutions for data backups and disaster recovery plans.
- Personnel Costs
If the company has an internal IT team, the budget should account for:
- Salaries and benefits: For IT staff such as system administrators, developers, and support personnel.
- Training and certifications: Ongoing training to keep staff up-to-date with technology trends and certifications (e.g., cybersecurity, network management).
- Software Development & Integration
If custom software development is needed (whether in-house or outsourced):
- Development costs: Building and maintaining custom applications.
- Integration: Costs for integrating various systems (CRM, ERP) for seamless workflows.
- Telecom and IT Services
Some companies outsource parts of their IT and telecom operations. Budgeting should include:
- Managed services: Outsourcing IT management (e.g., managed service providers for monitoring and maintenance).
- Consulting fees: Expert guidance on new systems, process improvements, or IT audits.
- Growth and Upgrades
As technology evolves, it’s important to plan for upgrades and future expansion. This includes:
- Upgrading equipment: Replacing outdated telecom or IT hardware.
- Expansion projects: Supporting infrastructure growth as the company scales.
- Emerging technologies: Investing in new innovations like AI, machine learning, IoT, or 5G networks.
- Contingency Fund
It’s essential to allocate a portion of the budget for unforeseen expenses:
- Emergency repairs: Unplanned maintenance or hardware replacements.
- Unforeseen upgrades: Adjustments due to regulatory changes or new business needs.
- Cost overruns: Buffer for unexpected project overruns.
Example Budget Breakdown:
Considerations for Tailoring the Budget:
- Company Size: Larger companies may need more infrastructure and staff, while smaller companies might focus more on cloud solutions.
- Industry Needs: Highly regulated industries (e.g., healthcare, finance) may require higher costs for security and compliance.
- Business Goals: Companies focused on growth or digital transformation may allocate more toward new technologies, software development, and cloud services.
A well-structured budget helps prioritize technology investments, reduce unnecessary spending, and ensure the business is ready for future growth.
To effectively plan for the future, it’s essential to understand where your company stands today. The Abilita A3 process provides a clear snapshot of the services you currently use, their locations, costs, and contract terms. Let us offer insights into your current status and what might benefit your organization going forward. To get an unbiased evaluation, feel free to contact us for a discussion.
Learn more about Abilita via this short video: https://youtu.be/qbCJYHs2shE