Common Mistakes in IT Budgeting

Although businesses cut costs in some areas due to likely recession, it doesn’t concern the IT budget – it’ll predictably continue to grow. Because of the pandemic and massive transition to remote work, managers understood that IT is not only worth investment, technology is critical to achieving success. And Clubs aren’t the exception.

But while planning the IT budget for a Club, General Managers or Controllers sometimes make mistakes and use their resources unreasonably. We prepared this article, so you avoid common oversights and get the most bang for your buck.

What you need to know about IT budget planning in 2023

SWZD presented its annual report on IT budgets and tech trends. We want to share with you some interesting data from it. 

  • Most companies (51%) plan to increase year-over-year IT spending, and only 6% plan on a decrease. 
  • IT budgets are expected to grow by 13% YoY in 2023, with a median increase of 5%, at the company level.
  • Factors that are driving businesses to increase IT budgets:

1. Inflation: 40% of budget increases in 2023 will be influenced by inflation, compared to 22% in 2022.

2. Need to upgrade outdated infrastructure.

3. Increased priority on IT projects.

4. Employee growth.

5. Increased security concerns.

6. Other secondary reasons for IT budget growth in 2023 relate to operations, including continuing to support a remote workforce, business revenue increases, and changes to business operations.

  • Managed services spending will account for 18% of IT budgets in 2023, up from 15% in 2020.

Mistakes in technology budgeting

Budgeting for technology can be tricky because you want to be ready for anything, but you also don’t want to overspend and waste valuable resources. It’s a delicate balance that many fail to achieve because of the following mistakes.

Mistake #1: The cheapest option is always the best

You need technology to improve your members’ satisfaction, streamline workflows, and increase employee productivity. So, it’s essential to look at the quality, not only at the cost. 

But the most expensive option isn’t always the best either, because it can include many features you don’t need. The price-quality ratio is the key.

Define the most important criteria for your Club and focus only on them when choosing technologies. Just remember that IT shouldn’t be an afterthought because it can significantly improve your bottom line and customer experience.

Mistake #2: Last year’s IT budget will work for this year

As technology and cybersecurity threats evolve and advance, Clubs need to stay up-to-date to succeed. It can be challenging because budgets are often tight, and it can be hard to justify spending on new technology when old systems are still operational.

You can overcome this barrier by conducting internal assessments to identify friction points and areas where upgrading to a new system or platform could improve business outcomes. This information can help make a case for the necessary expenditure to stay relevant and improve your Club’s long-term success.

Mistake #3: One or two internal specialists can handle all IT needs of your Club

Even an IT genius needs the occasional vacation or day off. Augmenting internal resources with an IT service provider can help bridge gaps and relieve your internal resources.

IT service providers can help take on some day-to-day tasks and responsibilities. It improves job satisfaction and employee retention since your team members will feel appreciated and empowered to take time off when necessary without jeopardizing your Club’s IT infrastructure.

Another crucial factor is that an IT service provider can help you in areas the internal IT team doesn’t have adequate bandwidth to cover or in which they do not excel.

Mistake #4: Thinking short-term

Always keep your overall business objectives in mind when budgeting for IT needs. Purchasing solutions that cannot grow with you is wasteful. You will end up spending more money in the long run. You can avoid potential roadblocks and extra costs by planning ahead as much as possible.

Partnering with an IT service provider can be an excellent strategy for IT budgeting. Club Support’s team has been working with clubs for over 20 years and knows everything about industry needs and costs. 

Do you want professional help with IT budgeting? Contact us, and we’ll choose and provide you with cost-effective solutions that meet your specific needs.

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