How to Maximize Flat IT Budgets
Economic turbulence has defined much of 2023. The year began with projections of a recession across every news headline. That recession never materialized, though uncertainty remains. As the year draws to a close, economists predict positive but weak growth in 2024.
Business leaders are moving forward with a significant measure of caution about budgetary planning. While a modest uptick is predicted in technology spending, one in three companies is looking at flat or shrinking IT budgets. This is especially true for small to mid-sized businesses.
In today’s business world, IT is the backbone of almost every company, regardless of industry vertical. It’s a key driver of operational productivity and business growth. For organizations that are facing flat IT budgets, what is the best approach to controlling costs while leveraging key technologies?
Ensure Alignment with Business Strategy
To make data-driven decisions about where to maximize flat IT budgets, IT leaders must ensure their 2024 technology planning aligns with business strategy. Many companies are now involving their technology leaders at a high level to help them make more informed business decisions. In enterprise-level organizations, 43% of IT leaders say they are regularly involved with evaluating their company’s business model, according to Forrester. This deeper understanding of the business allows leaders to more effectively prioritize future technology projects and investments.
Eliminate Redundancies
One the biggest challenges companies run into is implementing too many tools and creating redundancies. Of particular concern is “cloud sprawl.” As cloud computing has grown in adoption, companies have implemented an increasing number of cloud-based applications, data storage solutions, and other XaaS tools. Today, managing data and security across these siloed environments is overwhelmingly complex. The best way forward is to understand which tools provide the most return on investment and which ones are superfluous. Eliminating tools that create unnecessary complexities in the technical environment, as well as those that don’t integrate or aren’t scalable, will allow companies to focus on the tools and technologies that are truly critical to their infrastructure.
Leverage New AI Features in Existing Tools
IT leaders should evaluate whether current tech trends align with their business needs. AI, for example, is more than just a trending buzzword. It’s a technology that enables businesses to enhance productivity by automating workflows, gain actionable insight into their data, or expand the scope of their products and services. As AI grows in adoption, many existing technical tools, services, and platforms have implemented AI functionality into their suite of offerings. For leaders who worry about the limited buying power of their IT budgets, leveraging existing tools that have introduced AI-based capabilities can be a revolutionary tactic in pursuing their business goals.
Assess Risk in Cybersecurity and Privacy
Another of area of technology to keep top of mind when reassessing the budget is cybersecurity and data privacy. Technology is evolving, hackers are growing more sophisticated, and regulatory oversight is increasing. Leaders must ensure their existing technical infrastructure is updated and compliant, so their company and customers are protected from cybercrime. Investing a greater portion of the IT budget in this area will be necessary to prevent future breaches or penalties.
Upgrade or Replace Legacy Technologies
If a business is still dependent on legacy technologies, upgrades are critical. The risks associated with keeping legacy tools running are increasing. Many are no longer supported or updated by the original vendor, which could result in unexpected downtime or even total system failures. Simultaneously, outdated technologies run the risk of security breaches due to insufficient security measures. Even if a company avoids the worst consequences, legacy technology can be notoriously slow, creating costly inefficiencies across the enterprise.
Consider IT Consultants
Leaders should consider the makeup of their IT workforce. IT talent eats up a significant portion of the budget—hiring and onboarding can be expensive, especially if a company experiences turnover or underperformance. When there is a need for additional professionals to manage new projects, upgrades, and migrations, hiring IT consultants is a viable solution. This enables leaders to capitalize on their company’s unique strengths and differentiators, boosting innovation and competitiveness, without the cost of investing in full time employees. Working with an IT consulting firm like Resource 1 to expand the IT workforce allows companies to streamline their hiring costs and continue to maximize their overall IT budget.
Invest in Skills Training
When budget constraints prevent leaders from hiring—whether full time employees or IT consultants—upskilling can be a valuable alternative that allows companies to maximize their IT budget. Leaders who choose to invest in training programs and certifications for existing team members ensure that there will be talent to navigate more sophisticated technology projects—at the same time as engaging the existing workforce and boosting retention.
Practice Agile Budgeting
Ultimately, budgeting with an agile methodology is critical. By regularly reviewing, evaluating, and adjusting their flat IT budget in accordance with evolving technologies and changing business conditions, leaders gain more flexibility and control over their financial resources—even if unexpected technical emergencies occur.
Planning for 2024
With a significant portion of IT leaders limited by flat IT budgets as they head into the new year, preparing for 2024 will require cautious yet strategic planning. To maximize their spending power, these leaders should review their current infrastructure and tech stack, identifying areas that can be prioritized in alignment with the company’s business goals. Whether it’s updating and leveraging existing technologies or tapping into new or reskilled IT talent, there are numerous options for companies with limited IT budgets to ensure they can still innovate and compete.
What does your 2024 IT budget look like? At Resource 1, we can deliver top tech talent that aligns with your business objectives while achieving innovation in this shifting IT marketplace.