What’s more fun than IT? IT budgets, of course! Okay, so maybe fun isn’t the right word, but IT budgets are pretty important when it comes to your business, especially if you’re working in a data-sensitive industry like finance. Managing an IT budget can feel a bit like trying to fit a square peg into a round hole in that there’s always something new and shiny on the horizon, but with budget constraints, you have to be smart about where you invest your cash.
With the pressure to innovate and the constant demand for more resources, how do you prioritise spending, separate the essentials from the nice-to-haves, and still keep your CFO happy?
Prioritise, prioritise, prioritise
First things first; identify your must-haves. Every IT department has a list of non-negotiable systems and tools that are absolutely vital to day-to-day operations. This includes everything from cybersecurity measures (because no one wants to be the next big breach headline) to core banking systems that keep the money moving. These essentials should be at the front of your mind when allocating budget. Without them, the business simply can’t function.
But how do you decide what’s truly essential? One way is to conduct a risk assessment. What would happen if a particular system failed or if you didn’t invest in a certain technology? If the answer is total chaos or significant financial loss, it’s essential.
For example, skipping on cybersecurity will expose your firm to massive fines, not to mention the loss of customer trust. On the other hand, that flashy new AI tool might be cool, but if it’s not mission-critical, it belongs in the “nice to have” category with that super high-tech, all singing all dancing coffee machine for now.
Separate the “must-haves” from the “nice to haves”
Speaking of “nice-to-haves,” every IT budget has room for a little flexibility, just don’t get too carried away. It’s easy to get caught up in the excitement of emerging technologies. AI, blockchain, and advanced data analytics tools are all the rage, and for good reason. They offer exciting possibilities for enhancing customer experience, perfecting operations, and staying ahead of the competition. However, they often come with hefty price tags and significant implementation costs, so make sure you review how they will help you achieve your business goals before you whack them on the shopping list.
For example, if your goal is to improve customer experience, investing in AI-powered chatbots or personalised financial planning tools might make sense. But if your primary focus is on regulatory compliance, your budget might be better spent on tools that help to improve reporting and ensure data integrity.
Another strategy is to pilot new technologies on a small scale first before committing to a full rollout. This approach allows you to test the waters without diving in headfirst and helps you make data-driven decisions about whether the investment is worth it in the long run.
Use what you already have
Before you start signing contracts left, right and centre for new tech, take a closer look at what’s already in your IT arsenal. Many firms underutilise the tools they already have, either because they don’t fully understand the capabilities or because they haven’t invested in proper training.
For instance, your current CRM system might have advanced analytics features that you’re not using, or your cloud service provider might offer security tools that can replace third-party solutions. It’s a good idea to carry out a thorough audit of your existing technology stack to identify opportunities where you can use what you have more efficiently. In many cases, making better use of what you have can actually free up budget for other investments – we love a double win!
Adopt a cloud-first mentality
The cloud has totally changed how businesses manage IT infrastructure. By moving to the cloud, financial services firms can reduce the need for expensive on-premises hardware and gain access to scalable resources that grow right alongside the business. But beyond just moving to the cloud, adopting a cloud-first strategy can lead to significant cost savings.
But what does a cloud-first approach actually mean? Well, it means that when you’re considering new IT investments, your default should be to look for cloud-based solutions first. That’s because these solutions typically offer more flexibility, easier updates, and often better security than on-premises options. Additionally, cloud services often operate on a pay-as-you-go model, which can help manage cash flow more effectively, especially in tight budget cycles.
Invest in automation to cut costs
Automation is a game-changer when it comes to stretching your IT budget. By automating routine tasks, you free up your team to focus on more important projects and cut down on the need to hire extra people. Whether it’s data entry, handling customer service requests, or managing compliance reports, automation can save you a lovely chunk of money in the long run.
But don’t think of automation as an all-or-nothing deal – there’s no need to go big or go home here! Start small by targeting repetitive tasks that eat up a lot of time and resources. For instance, automating account reconciliations can save your team hours every month. Even small automation efforts can make a big difference, so look for those quick wins that can start paying off right away, you can then increase automation as you need from there. Remember what we said earlier about prioritising!
Collaborate across departments
Managing an IT budget isn’t just on the IT department; it’s something the whole company should be involved in. Working together with other departments helps you understand what tech they need and figure out ways to share resources. For example, if the marketing team needs a new analytics tool, IT might be able to tweak an existing platform instead of buying something brand new.
Regularly talking with other departments can also help spot overlapping purchases or tools that do the same thing. This not only saves money but also encourages everyone to work together toward the same goals.
Outsource your IT management
Outsourcing your IT can really help stretch your budget, so if you’re counting pennies outsourcing may be the right move for your financial firm. Instead of pouring money into hiring and training an in-house team, you can bring in experts as needed and skip the extra costs. You only pay for the specific services you need, whether it’s managing your infrastructure, improving your cybersecurity, or handling tech support.
Outsourcing companies also keep up with the latest tech, so you get access to solid resources without spending a ton. It’s a practical way to keep your IT costs under control while making sure everything runs smoothly. If you do decide to go down the outsourcing route, we recommend going for an IT firm (like us!) that have specific experience helping financial service firms. This means they’ll understand your industry, the regulations, and the importance of cybersecurity.
Want to talk to us about your IT needs? Talk to our friendly team, today! We’d love to help!