Budgeting for IT

How much will your 2011 budget cost you? That’s right! Budget for IT expenses incorrectly and you could end up paying big for the mistake!

By now most business leaders have or are fine tuning their budgets for 2011. I have always found budgeting for the big ticket expenses are always the same… the more risk I take the harder to budget and the more risk my provider takes the easier to budget. I have service plans for all of my vehicles because I couldn’t keep up with it, cars going without oil changes, expired tags and the list goes on. My techs were getting stranded, I was spending time delivering vehicles to the repair shop and then walking back to the office, need I say more? I tried giving my local repair guy a shot at helping me but he didn’t have a program offering so naturally it fell back into my lap and of course my problems where still there. After one of my vans died because I didn’t have the oil changed for a year I called another provider to help. They too didn’t have a program to offer but when I told him I would work with them to create one and I would purchase my vehicles from them they were happy to help. Travis Barton and Kenny Dunn at Victory Nissan in Mechanicsville (now Sheehy Nissan) worked hard and took the risks away and now I have a budget. Yea! I was also able to get rid of a position in my business so I actually solved a problem, reduced my risk and saved money!

Unless your provider can provide a fixed monthly fee to provide the services and not provide a traditional T&M (Time and Material) relationship you can’t budget. The reality is that T&M or “Break / Fix” is a reactive way to keep your systems operational. I like to call it “hoping and praying” which by no means will ever make sense if your business depends on the information that your systems contain. ARE YOU KIDDING ME! Seriously, you are going to hope and pray that your data isn’t compromised, your servers don’t fail unexpectedly and you are not going to have any clue how long your businesses critical applications, the ones that make business happen, will be unavailable all because it didn’t fit into a budgeted number. Where did this number come from anyway? Based on what? Why did you come to that amount, why not less or why not more?

The more risk the provider takes on the higher the cost and of course vice versa, for example… if your agreement includes 24/7 monitoring but does not include remediation of these alerts you cannot know how many alerts will pop up, the severity of the alerts and how much the fees will be. If you buy into 24/7 monitoring and include all remediation for a fixed fee then you will know exactly what you will be paying for. Here are some other security, business continuity and support services you should be looking for in your agreement if you want to have a fixed budget for IT.

Support
– Helpdesk (remote) & Onsite support
– Network administration
– Consultation / Strategic planning

Disaster Recovery
Minimized downtime & data loss factors (near zero)
– Data retention
Hosted services

Security
– Security licenses
– Intrusion Detection
– Internet content controls
– Email Security
– 24/7 monitoring with remediation

Remember… it is all about risk.

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