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4 valuable tech budget tips
1 Oct, 2007 By: Tyler Whitaker Landscape ManagementOver the years, I have been involved with all kinds of business planning exercises. Offsite retreats, onsite meetings, top down analysis and business process modeling. Great business planning always results in changes to the budget. But how accurate is your technology budget to begin with? I've collected a couple of tips to help you capture the line items that are often overlooked.
1. Employee growth — When it comes to new employees, planning for salary and benefits is pretty straight forward. But don't forget their technology needs. Will they need a PC, a cell phone or a pager /Blackberry? Don't forget to factor in usage costs of these items. Cell phone minutes, Internet access and extra long distance costs can all add up in a high growth environment. Developing a standard set of technology and costs can help you forecast the effects hiring can have on your budget.
2. Technology consumables — When you really stop to think about it, there's a fair amount of technology-related consumables that gets used up each year in an office. The first items that come to mind are the countless printer ink cartridges. Hopefully you've upgraded to laser printers, as the cost per page is much lower. Other items to remember include backup tapes, canned air (for cleaning computers) and of course copy paper. Being able to forecast these expenses can be helpful as you model your expenses.
3. Maintenance & support — Depending on the software that you use, you may have annual maintenance and support costs to factor into your budget. These costs are usually 15% to 20% of the initial purchase price and provide you software upgrades and the ability to call technical support. This is a great area to cut costs if you find that you don't use support very often. Check if your vendor has a pay-per-call or pay-per-incident option. Also evaluate how often you upgrade. Sometimes the best option is to use what works for as long as possible.
4. Hardware replacement — Most technology becomes obsolete within three years. That means that you should plan to replace roughly one-third of your company's computers and technology each year. While it's possible to squeeze extra life from some machines, the best practice is to track your hardware's purchase date and the date when it fails or becomes unusable. That way you can have hard data for use in your budgeting. Staying on top of your hardware replacement schedule can be one of the biggest contributors to an accurate budget.
Great business planning is only half of the battle. Being able to execute on that plan and adapt as necessary is where great companies tend to shine. Building an accurate and comprehensive technology budget should help remove the unknowns and allow you focus on your core business. Hopefully these tips will make budget and planning time a little easier.
— The author is a freelance technologist focusing in business automation. Contact him at 801/592-2810 or visit his blog at
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