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5 Major IT Budget Mistakes You Never Want to Make

The season of budgets is upon us! This time is full of difficult navigation through high hopes and terrible letdowns. In an article for ZDNet, Mary Shacklett lays out the worst budget mistakes IT can make and how they can successfully avoid them.

Five Mistakes to Avoid

  1. Fail to project longer-term cloud expenses.
  2. Under-invest in training.
  3. Throw money at storage.
  4. Delay hardware and software upgrades or replacements.
  5. Misuse outsourcing and consulting resources.

One of the prominent assets of cloud-based applications is that their expenses can be formulated during operations and either enlarged or shrunk as need be. However, this makes it difficult for an IT budgeter to accurately estimate expenses. If these types of third-party servers are part of the long-term vision of the company, then the costs should be paid, and perhaps, over time, they will become cheaper.

Training is often looked at as a discretionary expense, and training often suffers as a result. Training facilitates success and the continuation of education company-wide is vital. Develop training programs that are efficient and well spread out over the fiscal year. As for the third mistake, cheap storage is a terrible long-term investment. Yes, the initial savings are nice, but over the long-term it may in actuality cost more. Diversify the data and store what can be on the more inexpensive servers, but also be ready to invest in the faster ones.

Companies often fail to implement upgrades or replacements as a way to save some extra money. This can create a problem when a program’s lifespan ends and there is nothing in line to replace it. What would be better is to track programs with an asset management system that will indicate when a program is nearing the end. If an IT budgeter illustrates the risks of failure, the company may be more inclined to invest in these essential upgrades or replacements.

The IT department often outsources when it is believed that there is not enough money to hire people internally. Although this helps initially, it may have adverse impacts on the long-term financial health of the business. Implement a plan to transfer vendor knowledge to the staff at one point, so the staff can handle the rest of the project. Of course, sometimes outsourcing is just the most practical option, so play it by ear.

You can read the original article here: http://www.zdnet.com/article/five-major-it-budget-mistakes-you-never-want-to-make/

About Danielle Koehler

Danielle is a staff writer for CAI's Accelerating IT Success. She has degrees in English and human resource management from Shippensburg University.

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