Aug
30
‘13
budget, consulting, cost, IT

If you’re a regular reader, some of this article may seem familiar.  A lot has changed in IT since 2009 so I decided that the budget article could use a revision.  It turns out that some interpret this as “too lazy to come up with a new idea.”  Think what you will, I think this is important stuff to remember as you assemble data for your 2014 budget.

Before simply cutting and pasting last year’s number into the 2014 budget, here are some simple things that need to be considered:

  1. Capex vs. Opex – Cloud technologies are generally sold through a subscription model.  Many large companies and not-for-profits don’t have the flexibility with their budgets once approved to make this switch, so do your research ahead of time.
    1. Don’t overbuy – with some exceptions, the benefit of subscriptions is that software and hardware needs can grow with you.  There should be no need to try and guess what you’ll need three years from now.
    2. If planning for a capex project, talk to your accountant to see what items can be capitalized with the project.  For example, training can often be pre-purchased with a new software package and experts often disagree on whether it should be expensed or capitalized with the purchase.
       
  2. Software Licensing – Make sure that the counts you have for your software licenses are accurate.
    1. Have you added employees?  If you aren’t sure when the last time you counted was, now is the time.
    2. Do you have fewer employees this year?  While software licenses can’t be returned, this becomes very important for licenses that require periodic renewals (e.g. antivirus software licenses).
    3. If you have added employees, what licenses need to be adjusted?
    4. Are any employees using software that was installed without purchasing?  It is very common for a company to purchase one copy of a particular software title and, for convenience sake, allow a second employee to install it.  Now is the time to decide to purchase the second license or to uninstall the pirated one.
       
  3. Server Hardware – If your server(s) will have its 4th birthday in FY 2014, it’s time to ask some tough questions about possible replacement.  Unexpected Hardware failure forces companies to make fast, costly decisions at the expense of true progress.
    1. Have you had more than one warranty part replacement in the last year?
    2. If the server were to crash, how easily can you get parts?
    3. Can you handle the extra down-time for data recovery if the server dies?
    4. Is it time to go to the cloud?
       
  4. Desktop/Laptop/Mobile Computers – These are some of the toughest decisions because employees always want new equipment.  When is the right time?
    1. Do you have a 3-4 year rotation cycle?
    2. Is it cost-effective to only give power users the new computers and let others get hand-me-downs?
    3. Do any of your employees need to be more mobile?  Are laptops and/or mobile devices worth the investment?
    4. Should you consider leasing or Hardware-as-a-Service (HaaS)?
    5. Is mobile computing feasible as a replacement or will it be an additional expense?
    6. What does it cost to maintain mobile devices?
    7. Mac vs. PC?
       
  5. Emergency Hardware Fund – If hardware dies unexpectedly, don’t be forced to take a pass on the server replacement and put the company at even greater risk.  Build it into the budget.
    1. How big does it need to be?
    2. What equipment do you own that is out of warranty? 
    3. What would it cost to replace your out-of-warranty equipment?
    4.  Is your out-of-warranty equipment mission critical?
       
  6. Improvements – Don’t forget to consider ways to improve your operations and/or increase ROI.
    1. Do you need a better anti-spam solution?
    2. Do you need more Internet bandwidth?  This should always be part of the discussion when moving to the cloud.
    3. Is remote backup efficient and cost-effective?  Is it cost-effective to outsource the hosting of your e-mail server, SQL server, SharePoint server, file server, etc.?
    4. How can you improve your communications with staff, members/clients, prospects, etc.?
    5. Are you considering VoIP for your phone service?
    6. Is it time to consider an upgrade to your Wi-Fi network?
    7. Is it time to consider a new CRM, ERP, AMS, or other contact database?  Does your time-tracking system have the functionality you really need?

These are just a few of the reasons that it’s important to involve your IT professionals in your budget process.  Please give Promethius a call at 317/733-2388 when you are ready to discuss your technology budget.