IT budget season is upon us. Similar to 2023, inflation remains high, a possible recession looms, disruption persists in supply chains, and there is much unpredictability in the global market. With organizations continuing to waste 32 percent or more in technology spend across IaaS/PaaS, SaaS, data center and desktop software, clarity into the IT estate and proactive planning are essential.
Businesses are navigating an ever-evolving technology landscape—one that’s seeing convergence across IT asset management and FinOps teams—and IT budget planning is crucial for organizational success. As the pace of change continues into 2024, Flexera is here to provide helpful tips toward a successful technology plan:
1. Align IT with business goals
The first and most crucial step in IT budget planning for 2024 is aligning your IT strategy with your overall business goals. This ensures your technology investments directly contribute to your company’s success. Work closely with your business leaders to understand their objectives and challenges, and then identify how IT can support those initiatives. By having a clear understanding of your business’s strategic direction—and how your technology assets align to those business units, functions or initiatives—you can allocate resources to projects and technologies that provide the most value.
2. Embrace Hybrid ITAM and FinOps
Cloud technology has transformed the way businesses operate, offering scalability, flexibility and, in many cases, cost efficiency. As you consider migrating more of your IT infrastructure and services to the cloud in 2024, it’s important to understand what you have, what it costs to run and what advantages moving to the cloud could provide—and don’t forget the licensing implications of running software in the cloud. Gartner predicts that by 2025, 50 percent of organizations will unify software asset management (SAM) and FinOps into a singular practice focused on cost management and governance, so getting these teams aligned now will provide dividends later.
Could you reduce capital expenditures, improve resource utilization or enhance business continuity by investing more budget? Be sure to carefully assess your cloud spending as costs can quickly add up if not managed effectively. And if you haven’t considered the aforementioned FinOps practices in your organization, now may be a good time to do so.
3. Establish IT governance and compliance
Regulatory and vendor compliance requirements change over time. Allocate budget to ensure your IT assets and processes for reporting comply with industry regulations (e.g., FFIEC), vendor requirements (licensing compliance) and data protection laws (e.g., HIPAA). Failing to do so can result in hefty fines, unbudgeted true-ups and reputational damage. Regularly audit your IT governance practices and assets to identify and address any compliance gaps.
4. Prioritize security
In 2024, IT security and risk management will continue to be top concerns for organizations of all sizes. According to the Flexera 2023 State of the Cloud Report, 79 percent of organizations view it as a top challenge second only to managing cloud spend.
Cybersecurity threats are becoming increasingly sophisticated. That’s why it’s one of the ITAM team’s top priorities (alongside licensing and usage of IT assets), with 61 percent of ITAM teams providing the data and analysis to support these security risk mitigation initiatives.
Regular vulnerability assessments are vital to protect your data and systems from potential breaches, and ITAM teams can also help protect security by tracking end-of-life/end-of-service (EOL/EOS) assets to reduce risk of exposure due to unpatched or obsolete software. Remember, a strong defense against cyber threats can save your organization significant costs and reputational damage in the long run.
5. Regularly review and adjust
IT budget planning isn’t a one-time event; it’s an ongoing process. We’ll be back again next year with more tips and support, but in the meantime, regularly review your budget and assess its effectiveness in helping to achieve business goals.
Be prepared to adjust your allocations based on changing priorities, technology trends and unforeseen challenges. Flexibility is key to ensuring your IT budget remains aligned with your organization’s needs.
Effective IT budget planning for 2024 requires a strategic approach that aligns technology investments with business objectives. Prioritizing business goals, embracing the cloud, establishing IT governance and compliance processes, prioritizing security and maintaining flexibility through regular reviews are all essential components of a successful IT program. By following these tips, you can position your organization for technological success in the year ahead and beyond. Remember, your IT budget is not just an expense; it’s an investment in your company’s future competitiveness and growth.
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