Building an IT budget that survives the year

The usual pattern: a number is set in December based on last year's number, and by June it has been exceeded by things nobody planned for. The problem is structural rather than one of discipline.

Four categories, budgeted separately

Run. Keeping what exists working — licences, subscriptions, support contracts, connectivity, hosting. Predictable and dull. Should be roughly sixty to seventy percent of the total.

Replace. Hardware reaching the end of its cycle. Predictable if you have an inventory with purchase dates. This is the line most companies omit, which is why hardware always feels like an emergency.

Improve. Projects that change something — a migration, a new system, an automation. This is the discretionary part, and the only part that should be negotiable when money is tight.

Respond. Incidents, failures, urgent requirements. Not a slush fund, but a real allowance of around five to ten percent. Budgeting zero here means every incident takes money from Improve, which is why improvement projects never finish.

Build the inventory first

You cannot budget without knowing what you have. One spreadsheet:

• Every device, its purchase date, and its replacement date
• Every subscription, its renewal date, cost, and seat count
• Every support contract and when it expires
• Who owns each item

Two days of work. It will find subscriptions for people who left, duplicated tools, and equipment already past its replacement date.

The costs that get missed

• Per-user licence growth as you hire, which nobody indexes to headcount
• Annual price rises on subscriptions, commonly five to ten percent
• Cloud storage that only ever grows
• Certificate and domain renewals, small but embarrassing to miss
• Training, without which new systems are used at half capacity
• The cost of the incident you are not budgeting for

Review quarterly, not annually

Fifteen minutes a quarter against actuals catches drift early. A single annual review discovers in December that the figure has been wrong since March.

An IT budget's purpose is not to spend less. It is to remove surprises, so the conversation is about priorities rather than about explanations.

We help build these in IT consulting.