Today’s organizations rely more than ever upon technology to deliver services and meet the needs of their customers. In an increasingly competitive marketplace, companies with the ability to connect to customers quickly and adapt to an ever-changing business environment will set themselves apart from those that have yet to truly embrace digital transformation. However, provisioning and implementing the cutting edge technology that makes such flexibility possible poses significant challenges. That’s why IT budget planning can often mean the difference between a successful, growing business, and one that struggles to increase its market share.
Why Accurate IT Budget Planning is Essential for Your Business
While technology spending has long transitioned from being a “nice to have” benefit to an essential cost of doing business, organizations must still make difficult decisions when evaluating their IT budgets each year. In some cases, IT spending can bring immediate benefits, providing new capabilities that allow a business to better serve customers, streamline operations, and enhance collaboration. More often, however, technology investments are a long-term play that may not deliver immediate returns but are essential drivers in ongoing digital transformation strategies.
The most successful organizations aren’t necessarily the ones that spend the most on their IT budgets, but rather the ones that spend those budgets wisely. Ongoing assessments are essential to the budgeting process, providing decision-makers with an accurate picture of the company’s existing technology and identifying which investments will deliver the greatest benefits. A comprehensive technology assessment will also reveal opportunities for reducing costs and improving efficiency. What might have been the most cost-effective solution five years ago, for instance, may no longer be delivering the same benefits today.
Without accurate IT budget planning, organizations are left without any guidance when it comes to technology decisions. Every technology-related decision has the potential to impact costs, so it’s important to have a clearly defined budget in place to maximize both operational and strategic agility.
How COVID-19 Will Impact Your IT Budget in 2020 and Beyond
Prior to the COVID-19 outbreak, most market forecasts expected IT budgets to continue trending upward. The twin shocks of reduced global trade and falling consumer demand, however, have forced companies to radically reassess their IT budget planning for the rest of the year. As the COVID-19 crisis unfolded, Forrester revised its tech market forecast for 2020 downward. The market research firm now expects global tech market growth to slow to about 2% in the best-case scenario, with a 50% chance that the market will actually decline by 2% in the worst-case. Hardware spending is expected to take the biggest hit, potentially falling as much as 5% to 10% as companies put off equipment upgrades.
Shift to Remote Work
For many organizations, however, the biggest impact COVID-19 will have on their IT budget planning will be the shift to remote work. Cloud computing services that allow employees to access critical data and applications remotely have seen a substantial spike in demand. For companies that rely on these platforms to facilitate collaboration, IT budget planning will likely continue the trend toward increased cloud spending. Since technologies like virtual private clouds make it possible to do away with physical IT infrastructure altogether, many businesses may even decide to transition away from the capital expenditures (CapEx) of buying and maintaining their own servers.
Growth of Cloud Services
On the other end of the spectrum, cloud service providers will likely need to ramp up their technology budgets to keep pace with demand and deliver high levels of service uptime. Remote-based businesses will be seeking out reliable cloud solutions that maximize productivity and keep their operational expenditures (OpEx) at a manageable level. Whether cloud service providers maintain their own on-premises infrastructure or partner with colocation data centers, they must make IT budget planning decisions with capacity and uptime in mind to avoid missing out on opportunities in a competitive market.
The sudden transition to remote working environments has also forced many companies to reassess their cybersecurity expenditures. While cybersecurity investments are a mainstay of IT budget planning, the unexpected expansion in the number of people working from unsecured environments has prompted a frantic reallocation of resources. Thanks to COVID-19, organizations can no longer afford to take remote security for granted, which will surely drive many of them to seek more comprehensive turnkey solutions that allow them to address a variety of IT needs while also keeping essential data and applications secure.
Get the Services You Need While Sticking to Your IT Budget with DSM
Finding the right technology partner with the right combination of services to deliver peace of mind in a crisis is critical to successful IT budget planning. Rather than relying on multiple vendors for data protection, data recovery, and cloud connectivity, joining forces with a single provider who can deliver comprehensive, integrated technology solutions can simplify budgeting and greatly enhance flexibility.
With more than 30 years of experience helping organizations realize their IT goals, DSM is Florida’s preferred cloud provider and IT consulting expert. Whether you’re transitioning your infrastructure to the cloud or looking to assess your security and compliance requirements, our team delivers the individualized consulting and infrastructure services that align with your IT budget planning. To learn more about how DSM can address your organization’s IT budget needs in 2020, contact one of our cloud experts today.