4 ways to plan a better IT budget for 2013
By Rafael Brugnini
(As Vice President and General Manager for HP Software in EMEA, I lead an end-to-end software team across all of HP’s European operations. As founder of a Uruguay based software developer I understand the real issues businesses are facing and the vital role technology can play in solving them.)
Approaching fiscal year end, many of us are planning our 2013 budget and deciding how to spend any surplus. Having just spent a week at HP Discover Frankfurt, along with 9,000 customers, I was struck by the overall change in sentiment amongst our customers beginning to plan for the next 12 months. This time last year, the impact of stalling economies and government austerity measures led to a cautionary “let’s wait and see” mood. This year, whilst the economy is hardly upbeat, the sentiment my from 30 customer meetings has shifted to “we can’t wait anymore”.
More than ever, the pressure is to “do more with less”. Those I spoke to were asking for help “manoeuvring” their budgets. So before you follow the same plans as last year, consider the following to get the most out of your 2013 IT spend:
1. Avoid “delta budgeting”
Be honest, there is a tendency to allocate the same budget year on year and increase/decrease based on business environment. In 2013 stop pre-allocating your budget and challenge the old plans – there will probably be newly available, cheaper alternatives. Push to get the best possible deal from your vendors and shop around for more effective options.
2. Invest to save
Recent times have been tough and over the past two years IT budgets have been relatively flat. Gartner predicts IT spending to grow only 3.8% in 2013, so now is your opportunity to invest your budget in technology which will save money in the long-term. I always approach budgeting with the mentality ‘Next year I will have to do more with less’. This encourages me to invest wisely and focus on cost savings.
3. Focus on innovation
Traditionally 80% of budget is spent on keeping the lights on - the remaining 20% on innovation. Take money away from simply keeping things running; focus instead on enabling your business to be flexible and agile. Do not suddenly shift the entire direction of your IT, but instead selectively invest in innovation. Perhaps this year move more of your applications to the cloud or harness the value of your Big Data?
4. Manage your assets
To do the above effectively you need to fully understand and optimise your IT assets. If you do not currently run one, consider reserving budget to invest in an asset management system, one which can flag any wasted spend and highlight unnecessary assets. For example, think about how much money do you spend on under-used licenses across all of your vendors – can you consolidate these? Are you sure you are using the most optimal licensing mechanism from your vendors ? Think about archiving less business-critical data or reducing the complexity of your IT infrastructure.
We are all busy so there is seldom time to be strategic but this year take the time to give your spending the attention it needs.
My next blog post will offer advice on managing the complexity of IT including how best to manage all your vendors. Do you know the average time spent on managing IT vendors? Take a guess and join me next time to see if you are right….
In the meantime if you have any questions or tips please share them below.
Follow Rafa on Twitter: @RafaelBrugnini