Budgeting for IT Support and Networking

We've written a two-part series of articles discussing how to help you grow your network to assure you meet your company's IT needs. Part I focused on how to start the new year with a sound network. This month's article discusses the importance of budgeting for IT support and networking for increased productivity and growth in 2008. With the New Year fast approaching, now is a great time to not only review your company's current network but also to establish budgeting guidelines based on average product life expectancy. With companies depending upon computer technology now more than ever, you must make certain your system remains an efficient tool for your company. Generally, computers and network servers can last between four and five years but IT experts state if companies want a realistic monthly budget, they should assume a three-year product lifecycle. It is also recommended companies budget to replace both computer hardware and software every three years.

Budgeting for Hardware, Software & Installation In order to effectively budget costs in relation to hardware, software and installation, you would need the total costs of all hardware and software your company is currently using. Include a labor cost projection of $2000 per server and $250 per workstation. Total up all costs and divide this number by 36 months and this results in your monthly costs for hardware, software and installation budget. According to San Jose accountant Monica Bailey of Monica Bailey & Associates, "Companies can also take a more accelerated rate than typical depreciation on these types of assets. And, accounting software should be budgeted on an annual basis and kept current." Budgeting for Support To budget the costs associated with IT support, INS recommends to allocate approximately 20 minutes of support per computer each month. This includes the workstations and network servers. Some workstations will not need support each month, but it is best to average this amount monthly and also yearly.

"The best way to budget IT support costs is to take the previous year's total IT costs and add 10%," adds Bailey. "The 10% variance gives you an overall budget from year to date with ample room for cost increase."

IT support can be based on the following levels:

Level I - Monthly Service Contract This consists of a reduced hourly rate service contract and is the best overall option for customers. Level II - Block Time Clients can purchase a block of time to ensure they receive priority IT support. Level III - As Needed Clients pay an hourly rate based on each support visit, phone call, and additional services such as the remote monitoring service. I recommend the monthly service contract for customers as this option provides the most value for customers. Rather than receiving a bill each time your network is serviced, you prepay your account for a set amount of monthly hours. If you don't use the hours, you can roll the unused minutes over to the next month. If you should exceed these monthly minutes, you would pay an overage. This allows you to typically receive one monthly bill unless you should go over your prepaid hours.

Overall, the monthly service contract is the way to go with IT budgeting because it allows you the opportunity to carryover your monthly hours and build these up for later usage. Preventative IT budgeting and maintenance can help to ensure the success of your computer systems and your company while also saving money in the long run. Ultimately, IT budgets should focus on spending that helps employees serve customers more effectively and makes the company gain and retain operational excellence. About Thomas Burns and INS Thomas Burns, founder and CEO of Intelligent Networks Services, Inc. has been an industry expert in computer network and technology for over 20 years. Under his careful supervision, INS has become a leading, full service IT support company servicing small to mid-sized businesses in Silicon Valley. INS's goal is to save their client's money by focusing on preventative maintenance and intelligent network designs. For more information go to www.intelligentns.com/subscribe and receive a complimentary network evaluation.