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How to Get the Most from IT Budgeting and Lifecycle Management

Many organizations will be at varying levels when it comes to their IT budgets, including lifecycle management. Oftentimes more than half of an IT budget is spent on maintaining an organization’s IT. Meaning, if any new IT projects or innovation need to be done, you may require a larger budget. According to a recent article by Deloitte Insights, Reinventing Tech Finance: The evolution from IT budgets to technology investments, on average, only 8% of a budget in banking and security industries goes towards IT. In other industries, an average of 3.6% of the budget goes towards IT.  

What to Look For in an IT Budgeting and Lifecycle Management Partner 

There are two value components you should look for in choosing an IT partner:  

1. The IT budgeting process is a business-focused, continuous discipline to drive spending and cost reduction, while maximizing business value. It includes obtaining the best pricing and terms for all IT purchases, standardizing, simplifying and rationalizing platforms, applications, processes and services as well as automating and digitizing IT and business operations.  

Improving your budgeting process helps you get close to the actual cost of your IT purchases. Budgets are always changing but knowing all of your current costs, having an idea of upcoming projects, and knowing what your organization considers to be IT, can help you create a budget that is close to your true IT spend. 

2. Effective asset lifecycle management is a multi-phase process that includes the planning, acquisition, operation/maintenance, and disposal of your technology products. It also involves monitoring and providing the financial return during an IT product’s “vital life”. Put simply, it’s making sure all IT products and equipment in your organization are tracked, managed, and upgraded to optimize productivity and minimize risk for your organization.  

Like a vehicle, the more you use technology the shorter the lifespan it will have. You can maintain it as long as possible but eventually it will reach its end of life, and you need to be prepared for what comes next.  

The right partner will help you get the most for your budget AND provide a high level of expertise and knowledge to determine when IT assets have reached the end of their lifecycle.   

By helping you understand when IT expenses will arise and the decision making opportunities around that date, your IT partner may put options on the table you hadn’t considered before.  

Here is an example to demonstrate: 

A server will be out of warranty in 2025. You have several options: 

  • Purchase new equipment and budget as a capital expense  
  • Lease equipment and budget as an operating expense 
  • Get a warranty extension 
  • Explore a hosted cloud solution rather than using the server 

An experienced IT partner can help you evaluate your options. When working with longer-term budgets, you can be more strategic because you’ll have the ability to plan ahead and examine all your options instead of reacting to issues when they arise. You need control over expenses and a clear picture of upcoming costs. Budgeting, including lifecycle management, can help plan for expenses including hardware (desktops, servers, storage, network infrastructure, etc.), software licensing and support.   

Ready to Learn More? 

If you want to learn more about budgeting and lifecycle management as well as IT services in general, visit Managed IT Services, check out our blog post Navigating the Maze of IT Services, or get in touch with us for a no-obligation consultation.