All business owners understand the importance of budgets and utilizing them as a roadmap to decide when and how to allocate resources. We know that if we want new clients we need to reflect that in our marketing budget. If we want to implement a new product or service, we have to budget appropriately. An owner of a construction company may have no problem buying a dump truck to carry items to and from a jobsite. They know that it will increase productivity and decrease downtime. They are also aware that it will require regular maintenance and upkeep and budget for these things ahead of time. So why is it so hard for businesses to apply those same values to their IT budget? I think it is because technology has grown so complex so quickly and so many parts to the IT infrastructure are hidden and behind the scenes and while they are working away to provide connectivity, access to critical files and business processes, they may not be as visible as the monitor and keyboard at a person’s desk.
The reason for this extreme growth over the last decade is because industry wants to find ways to automate services to provide quicker and more consistent results. The use of properly run computer networks has meant that small businesses could do more with less people. However, in many cases, budgets for that technology have not been considered or increased to provide for maintenance, planning for future growth and upgrades as operating systems are retired and hardware reaches the end of its usable life.
If your computer network is down and you cannot access any information or communicate effectively with clients, how much money is that costing you per minute or per hour? For some this might not be a big number and for others it could be staggering, even crippling. It has never been more important than today to work with IT support staff to create the right budget that properly addresses your targets and goals. As your business grows, having an infrastructure in place that can expand with your achievements and is in line with your plan for future growth is key to success. Planning for growth and planning to minimize downtime in the event of unforeseen events are key in developing a truly great business plan.
Here are some key tips when designing a technology budget
- Figure out what your current true costs of IT are
- Figure in how much money you are saving by automating a function that a human used to do.
- Figure out how important Data security is and what value you place on it
- Can your business weather a certain amount of downtime, or are some systems critical enough to the business to warrant putting in place redundant systems that can provide backup access to internet or files should the primary system fail?
- Develop a plan to rotate out old hardware and software on a yearly basis
- End of life programs are released sometimes years in advance
- As a general rule, workstations and servers should be replaced on a regular cycle, typically once they are 3-5 years old.
- According to IDC (International Data Corporation) reports, starting in the fourth year of the life of a server, support costs increase dramatically: about 40% more in year four, 200% more in year five, 270% in year six and about 400% in year seven. Best-of-breed organizations use a manageable refresh cycle of every four years (begin retiring at year four) and/or 20% hardware refresh per year (20% of the data center replaced each year).
- Other hardware have usable lifespans as well, including routers, switches, firewalls, etc., and factoring these in to your budgets is a crucial piece of the Lifecycle Management Plan.