IT budgets, how to make them work for you

Small Businesses often have no IT Budget, or, if they do have one, it's based entirely on historical spending patterns.  Follow a simple five stage process though; and your IT Budget becomes a powerful tool for planning and control of finances, which will save your business money.

1. Record.  Check your accounting records and collate all your IT expenditure (including printing and copying).  This is your baseline, the place to start from.  In most cases, the figure you have now could be significantly reduced by the time you come to the end of the process.
2. Plan.  Don't focus on the solution here, focus on the need, what the business needs your IT to achieve.  Talk to everyone in the business to see what works for them, what doesn't, and let this guide you.  Write your requirements up in simple clear business terms.
3. Tender.  Take your basic requirements (defined above) and contact at least three IT suppliers per solution and ask them to present a solution.  If you're not sure who to contact, use Google to search out local suppliers, or ask your contacts who they use.  This process works for everything from "I need to kit out all my salesmen with laptops" to "I need a complete finance package for the business".  Look for testimonials and references, and make sure you talk to reference customers on the phone to make sure their experience was a positive one.
4. Document. You should now have your existing expenditure, a set of requirements and a number of bids to satisfy those requirements.  This forms the basis for your IT budget.  Write this up in Excel, and project your costs across a 3 year timeline (the normal period for initial hardware warranties, and the accepted minimum useful lifetime of any IT system).
5. Polish.  From here you can put as much effort into the process of review and amendment as you wish.  Find more suppliers who can provide the solutions you think you need, get them to quote for the work.  See if you can source hardware and software directly from online retailers like ebuyer.com, it247.com and lambda-tek.com.  The more work you put in now, the more money you will save.

If you put a little time and effort into this process, you'll have a much better idea of what IT does for your business, what it can do, and how much it costs.  If you are lucky enough to have a 'technically savvy' person in the company, or even your own IT staff, their involvement will be critical in this process, particularly in the Plan and Tender stages.  Alternatively, you can engage a Consultant who can help you with the Plan and Tender stages, but if you make sure there is no conflict of interest (i.e. the Consultant's company isn't bidding for any of the tenders or supplying any of the hardware or software).