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IT department is the backbone of every organization. With the advent of technology, the efficiency and productivity of an organization depend almost entirely upon the IT department. Today's enterprises are looking for ways to manage their budgets more effectively by making accurate predictions when it comes to the allocation of funds. The key to resource optimization lies in the right budgeting process.

Why is IT Budgeting Important?
Today’s Information Technology (IT) organizations are engaged in an unprecedented challenge: they must balance the need for a clear roadmap, with the need to respond to the needs of the business. This challenge is profound and requires a broad reexamination of the traditional approach to budgeting in IT.
Information Technology Budget.

Hardware.
Hardware includes all systems in use in the company, including desktops, laptops, tablets, and mobile devices. Hardware is also used to support the network infrastructure within the company—this includes routers, switches, firewalls, and wireless access points.
Software.
Software costs include the cost of purchasing software licenses, including upgrades and renewals for existing software. This category should also include any upgrades you anticipate, as well as any cost of support for software you may be considering.
Common Mistakes in Information Technology Budget Planning.
Delaying Upgrades or Replacements.
The trouble is, most businesses don’t think of IT as a long-term investment. Instead, it’s treated as an expense to be minimized or avoided altogether. As a result, many business owners tend to delay upgrades or replacements to reduce, instead of optimising costs. Delaying upgrades and replacements can save money in the short term. However, it also means taking on greater risks with your IT security and performance by running outdated hardware or software.
Not having a disaster recovery plan.
Disaster planning involves making sure that your backup systems are up to date, that critical systems are accessible, and that employees know their roles in an emergency. A cyberattack is an example of a disaster for which there must be a contingency plan in place. The DRP is also a kind of business continuity plan. In the event of a disaster, your DRP should outline the best practices your company will take to keep operating.
4 Steps of Successful IT Budget Planning.
Set the right objectives.
Regardless of budget models for information technology, the first step in making an IT budget plan is to outline short-term and long-term objectives. What are the short-term goals that you want to attain? How about the long-term targets? What do you want your company’s IT budget to look like over the next one year, three years, five years, ten years?

Evaluate your asset inventory.
Another important step in information technology budget planning is to evaluate your asset inventory. This process should include a review of all hardware, software, operating systems, applications, databases and network devices. It helps you understand what equipment is currently deployed and how it’s being used. This helps you determine whether the hardware you have can support your future IT initiatives or if you need to make some upgrades or purchases.
Set Budget Management Roles.
Business leaders should set clear roles for IT budget management to be able to respond to the challenges of digital transformation. Budget management is a complicated process, and it’s important to give key staff the right roles and responsibilities when preparing your IT budget. You don’t want to accidentally hamper your organization’s ability to manage its budgets effectively, so be sure to set the right expectations for your staff members.

Set Contingency Plans.
As crucial as it is to be able to plan for your IT budget, you also need to develop contingency plans should your initial IT budgeting estimates prove incorrect due to changes in the economy. Budgeting is an iterative process and you will need to make revisions as you work through the various aspects of your plan.

Conclusion.
IT department budget planning is often a difficult task. You need to take into consideration many factors before you can come up with the best possible solution. Successful budgeting is critical for IT organizations to meet business needs and continue to support an organization as it grows.
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