If your company’s fiscal year ends with the calendar year, now is the time for new year budgeting. Budgeting for technology purchases can be an overwhelming process. It is easy to overlook critical items that must be included in your budget plan. There are several key items that must be considered as part of your technology budgeting and purchasing process.
1. Know your goals.
Technology has the potential to transform the way that a company may improve its operations, connect with clients, and differentiate itself from its competitors. How do you know what technologies are best for your organization or what vendors you should be working with? Before you can begin to answer these questions, you must know your business goals. What areas of your business need improvement? Where are the challenges in your workflows? Is the problem a limitation of the tools you already have or could the problem be simply a lack of training or clearly defined processes?
Don’t assume you know the answers to these questions. Talk to your employees. When you know how your employees use technology and the challenges they face in their daily tasks, you can then begin to seek new solutions that are simpler, more efficient, and enable your employees to do a better job and add value to your business. Involving your staff in the discovery process will also aid in the implementation process. If you are going to impact your employees with new technology, they need to be part of the process.
2. Get a clear picture.
Look for hidden costs associated with any solutions you are evaluating. If you are considering a software purchase, for example, you must ask questions of the software vendor to ensure there are no surprises down the road that would cause you to exceed your budget. Is there special hardware that must be purchased to support the product? Will the solution work on your existing network or are upgrades required? Is any customization required of the software that will cost extra? Are there annual maintenance or service fees in addition to the price of the software?
3. Don’t forget training!
When implementing new technology solutions, you must budget for training and implementation costs. In large projects, the cost of training and implementation could exceed the base cost of the solution itself! Do not be tempted to engage in a single training session and expect your employees to apply that learning immediately with no additional training or follow-up. Thorough training allows employees to use the technology to its fullest. A quick training session may allow employees to learn basic functions they will use regularly, but without additional instruction, they are less likely to use all the features of the technology— features that could add additional value for the company.
4. Budget for Ongoing Support.
When evaluating new solutions, you need to evaluate how that solution will be supported. Evaluating support is often overlooked, and yet, inadequate support can create lots of problems for a business. Are you required to purchase a support agreement to obtain access to assistance beyond the initial implementation of your solution? Are you charged hourly for support? Is this solution critical to the operation of your business? Do you operate outside typical business hours, and if so, is support available? Is there an additional fee for after hours support? How much time and money does the average client spend on support in the year following a new purchase?
These questions are especially important if you are considering a custom software solution. Custom software solutions are common in today’s complex business environments. What aspect of maintaining the solution is your responsibility versus your vendor’s? If you want to make a change to the system once in place, who’s responsible for that? Does the vendor charge for changes, or is there an allowance for changes as part of your support agreement? Know what is included in support for customized products and what measures will cost extra. Vendors will commonly offer various packages so that their customers can customize their support package to meet their specific needs.
5. Define how success will be measured.
Finally, before committing budget dollars to solving a problem, determine how you will measure the success of your project. Will success be defined as greater output? Dollars saved? Hours saved? Technology should always pay for itself. When you review your project from a financial standpoint, you should be able to confidently say, “this is a win.” You can only do that if you have clearly defined outcomes that are measurable, and you are confident you have captured all costs required for the successful implementation of your project.