Do you need to plan an IT budget?
Businesses often make costly errors which lead to higher project estimates and financial problems.
In addition to financial losses, the company may also lose opportunities to improve its services, as well as its infrastructure.
Sometimes companies get excited about a project that they thought would be easy, only to find out that it wasn’t as simple as they thought it was going to be. There are a lot of moving parts, and it’s easy to get lost in the details.
This can lead to unexpected costs, missed deadlines, and frustrating experiences with customers. It’s critical to define the scope clearly from the beginning so you can be sure you’re fully prepared for anything that comes your way.
Creating a proper budget is one of the best ways for companies to manage their funds wisely and make sure their projects are completed on time.
In this article, we will discuss some of the most common mistakes that businesses make when planning their IT budget and how to avoid them.
6 common IT budgeting mistakes
When establishing an IT budget, there are definitely a few things you should avoid. Here are the biggest mistakes that can cost you time and money:
Mistake 1: Underestimating your costs
Example: The budget was not enough and the development team did not build some features (security or something that may not be key in functionality, but broke everything else) because it would’ve needed more work.
There’s always a risk of underestimating how much work it will take to get things done. If you’re not sure how much work it’s going to take to build a feature, you can always ask your team members. It’s also a good idea to look at similar projects that have been done in the past and how long they took.
Mistake 2: Allocating quite a serious budget and hiring too many experts
Example: A large sum of the budget was allocated, but many specialists were hired and had to be let go at the end of the year. In this case, the outstaffing model would have been more effective.
You may decide that the best way to spend your money is on hiring a team of experts and giving them a large sum of money to work with. Allocating a large budget can seem like a good idea. But this can backfire. Too many experts can lead to a lot of wasted time and money.
Mistake 3: Overestimating implementation expenses
Example: Although the company allocated a lot of funds, it was not possible to implement everything. Before the end of the fiscal year, the company needed to come up with something quickly. It was difficult to do within the company, so outside help was necessary.
The biggest mistake that companies make is overestimating their costs. It’s important to understand how much each component will cost and how much time it will take to complete every part of your project before finalizing anything. Make sure you have a clear picture of what your business needs from its technology department.
Mistake 4: Forgetting to include licensing fees
Example: When drawing up budgets, licenses for some IT products are not taken into account (for example, monitoring, databases, etc).
If you’re looking to implement a new IT system, it’s important to keep track of the licensing fees that go along with it. It’s easy to forget about these costs, but they can add up if you don’t account for them. This can cause problems later on if you suddenly find that you have been hit with a large bill.
Mistake 5: Not defining the scope properly
Example: A project manager allowed designers to use their discretion about what design elements to use and how much of them to include. He didn’t want to spend too much time on this process, so he let them make decisions quickly. As a result, some things were chosen that weren’t necessary for the final product, which slowed down production and cost more money than it should have.
When you don’t define your project’s scope ahead of time, it can be difficult to check whether or not you have enough money, which can lead to even bigger problems down the road. If you don’t define the scope of your project, you run the risk of making decisions that aren’t in line with those goals—and this can lead to wasted time, money, and resources.
Mistake 6: Thinking short-term
Example: You decide to cut down on your costs by eliminating a particular feature, but you may find that other areas are affected as well.
This is a common mistake that we see, and it can lead to some serious issues. When you focus on the short term, you may not take into account the long-term consequences of your choices. It’s crucial to keep your overall objectives in mind. First of all, get an accurate assessment of your company’s current position in the marketplace—and what it needs most in order to move forward in a positive direction.
Partner with Dedicatted for success
Partnering with a service provider, like Dedicatted, will allow you to get a thorough comprehension of your tech needs and the cost to meet them.
We’ve worked with customers of every size and scope. Our experienced team can assist you with the following:
- Creating a budget for your IT requirements
- Analyzing the benefits and disadvantages of various technologies
- Calculating the cost of new services needed to keep up with requirements of your infrastructure
- Choosing the right tech stack
- Finding ways to save money
- Evaluating existing strategies to improve operations
- Setting up an effective IT strategy that will help your business grow.
We know how to help you create a plan that works for you. Our experts can provide cost-effective solutions that meet your specific needs.
Contact us to schedule a free consultation. You can reach out to us via contact@dedicatted.com
