Every business owner, manager, and employee knows how imperative budgeting is. Being financially prepared is important – especially when the ability to adapt and pivot can make or break a business. The COVID-19 pandemic forced organizations to spend money on IT throughout 2020 and 2021, whether they planned to or not. Your IT budget should now focus on creating flexible solutions to help businesses continue operating, regardless of what happens next. When it comes to IT budgeting, you can’t afford not to. So, how are you budgeting for IT in 2022?
We asked several of our team members what they’re seeing – with clients, partner organizations, and when planning for ADNET in 2022.
“Clients I have spoken with are very concerned about what 2020 and 2021 looked look like. The Pandemic created so much uncertainty, and no one knows exactly when it will end. One thing that is clear is the importance of IT to a business’ overall safety and security. Organizations are making very tough decisions regarding where to spend their funds. However, clients are dedicating more time to having discussions focused on keeping their infrastructure as secure as possible.” – Ronald Gibson, General Manager – Albany
Why do you need an IT budget in 2022?
Unless you’re one of the lucky few who enjoy budgeting, this might not be at the top of your to-do list. That doesn’t make it any less necessary, though. Many businesses were forced to make difficult choices throughout the last two years, having spending decisions dictated by the pandemic. You’re in a better position when you’re in control of planning how your IT budget is spent. What was once thought to be a blip on the radar has become a way of life. How we’ve adapted during this crisis will alter the way people do business for years to come.
Systems implemented as interim solutions need to be properly evaluated now that organizations have lived with them for a while. Are they sustainable? Do they cost too much? Are they giving you what you need to do business, and could they work better? These are the questions to ask as you budget for IT in the future.
Here are some things to think about as you’re planning your IT budget leading up to 2022.
How’s your office space?
Many businesses have been working remotely since March of 2020. Working from home successfully long-term prompts the question – do you still need a physical office? The way organizations support their team and clients has changed in the last few years.
ADNET spent 2021 reimagining its Connecticut and New York offices and focusing on building out new, high-tech collaboration spaces that supported a permanent work-from-anywhere model and matched our culture. Don’t hesitate to reevaluate your space and make sure it still works for you, your employees, and your clients. Paying for space that doesn’t function optimally just isn’t worth it anymore.
Depending on your organization, a rented co-working space may be a good option for offices when you need them. These rentals or membership offerings include everything from private offices to conference rooms. Employees have the ability to stop by and grab a desk in the common area whenever they need it. You could also downsize to a smaller office, opting to have a handful of employees onsite, or let people reserve space when they need to come in. If you just need a place to meet with clients, you may be able to work with local businesses with extra space, or sublease part of a building that’s not being fully utilized.
Consider the space you need to run your business.
How are you storing product (if applicable)? Do you need somewhere you can meet with clients? What about video conferencing systems for team members and clients all over the map? Whether you’re planning to maintain your current footprint or change things up and go virtual, now is the time to consider the costs of both options. Even standard operating supplies and utilities for a physical office – think coffee, reams of paper, internet, electricity and more – can drastically affect your budget.
From an IT standpoint – do you need a server room (make sure to consider the costs of properly heating and cooling the environment) or could you be in the cloud? If your systems aren’t on premise, your physical location is more flexible. Does your team have everything they need to do their jobs effectively, from anywhere? With the surge in at-home technology requirements for everything from work to education, planning ahead is key in ensuring that waiting for equipment won’t leave your team unable to be productive.
Should you keep IT in house, or work with a trusted partner?
There’s no right or wrong answer to this question, because it depends on how your organization works and what IT needs you have. The short answer, however, is that it can be very costly to have a department or individual that can do everything you’ll ever need. You’re not just paying for the employee or department; you’re paying for the time it takes them to learn certain skills or gain the necessary experience. In most cases, it’s helpful to supplement in-house IT staff in a co-managed model with an IT partner who can fill in the gaps.
A trusted partner acts as an extension of your team. Bringing in additional expertise can provide advanced technical support, cybsersecurity services, additional hours, cloud support, or managed IT services. An IT partner who understands your organization can even help with project work to help you achieve your long-term business goals. If you don’t have in-house IT staff and it makes sense for your business, fully managed IT services are an option that helps your team focus on other things.
Whether you use a fully managed or a co-managed support model, Managed IT gives your employees access to experts and technical assistance no matter where they’re working from. Cybersecurity services help keep your employees and systems safe, regardless of how those systems are being accessed. If you’re in the Cloud or considering making the move to it, an experienced cloud partner can get you started. Look to the experts for help optimizing costs and managing your cloud environment.
Ultimately, the choice is yours. Price out a variety of scenarios (in-house, fully managed and co-managed) and see where you end up. It might make the decision easier.
In 2022, is op-ex better than cap-ex?
Again – there’s no right or wrong here because it depends on your organization and business model. We’re pretty passionate about the op-ex model as you can see from this blog. The benefit of capital expenditures is that you only pay once – but what happens if you pay for something that you can’t use? With operating expenditures, you have much more flexibility and can redirect the investment if it stops working for your organization.
“It’s easier to change a monthly subscription if it’s not working for your business. You don’t have to stress over getting the cutoff date exactly correct so you don’t end up paying for a year of something you don’t need. If you’re transitioning to a new service, you can overlap different tools for a few months at a nominal price until you’re ready to fully move to the new service.” – Lynette Maffei, Vice President & CFO
Subscriptions based on a per-user cost can make it easier when dealing with staffing changes, growth or turnover.
Monthly subscriptions to things like Microsoft 365 can also ensure that users have the most current experience. You’ll have access to all the updates and improvements without having to purchase the latest version. Opportunities for creating predictable monthly spending don’t just apply to subscription services through; with a financial partner you can lease almost anything – from printers to hardware.
“Knowing the product life cycle helps you avoid downtime and make the right decisions when you’re budgeting. Waiting until a product fails can put you in a tight spot from a financial and productivity standpoint. Not only will you face limited product availability, you may also be dealing with prolonged downtimes. Planning to replace hardware ahead of time is key for budgeting successfully – whether you choose to buy or lease.” – Chris Florentino, Engagement Manager
The past two years have taught us that uncertainty renders the best laid plans useless. The ability to scale and flex subscriptions and other costs helps you make effective financial decisions that are easily adjusted as things change. Learn more about managing subscriptions here.
The bottom line when it comes to your IT budget this year
The bottom line is, you have to budget – but you also have options. IT budgeting isn’t a one-size-fits-all approach – it needs to be tailored to your organization’s goals. The key to budgeting effectively is planning as much as possible, while understanding that things may need to adjust as time goes on. This flexible approach gives your organization room to adapt and grow as your needs change.
If you find yourself wondering what to do, consult your network. See what your peers are doing and look at the general IT budgets within your industry. Ask your IT partner for help. ADNET offers to meet with every client (virtually if needed) and assist with cost optimization, budget development, and create customized roadmaps for upcoming IT improvements and expenditures.
Before making any of these tough decisions, we encourage you to work with your vendors and partners to come up with creative solutions. Don’t assume there aren’t options for your business – ADNET is happy to help you chart your course for 2022. Need help? Reach out to us.