What Makes Up an IT Budget

Budget2Lately, businesses have been witnessing a drastic and consistent increase in their IT budgets. The reason is the swift pace with which technology is evolving. Keeping view of the increasing competition and the race for survival, SMEs are having a hard time in keeping the costs down to compete effectively with large scale businesses. While most startups overlook the significance of investing in IT, they brush off the idea of having a dedicated IT plan and budget just to curtail additional expenditure.
When devising an IT plan and its associated budget, a lot depends on how companies segment their IT expenses and what aspects need to be included in an IT budget. Keep reading to unveil some of the crucial components of an effective IT Budget:

IT Support and Maintenance

The costs related to your IT support and maintenance fall into this category; basically, the network and infrastructure expenditure. Keep in mind that they are recurrent expenses that help maintain the current and future condition of your IT environment. The sub-components of this component are:

  • Internal IT staff’s salary and benefits,
  • Support costs of external IT staff (monthly cycle),
  • Annual support costs to be paid to vendors,
  • Training and education cost of IT staff,
  • WAN, ISP and VPN expenses,
  • Other outsourcing costs.


This category entails your equipment costs and any other additional hardware and support costs that are anticipated. It is ideal to put larger hardware implementation expenditure under project section as it requires thorough planning. Generally, the hardware section of an IT budget comprises of the following:

  • Computers and laptops,
  • Servers, firewalls and routers,
  • Switches and cabling,
  • Licenses, warranties and renewals,
  • Routine hardware maintenance costs.


Software category entails the current software expenses and any anticipatory expenditure that you may come across with. This category usually consists of:

  • Server, laptop, desktop software,
  • Anti-virus, anti-spam and backup software,
  • Licenses, warranties and renewals,
  • Routine software maintenance costs.

Cloud Services

All kinds of cloud service provisions and requirements fall under this component. This category comprises of sub-components such as services, hosted desktops, hosted mail etc. It also incorporates the costs related to public, private and hybrid cloud models and their implementation.

Backup and Disaster Recovery

All the costs related to your business continuity efforts and plans will be a part of this component of the IT budget. While evaluating which costs should be a part of this category, consider the following:

  • Software and hardware,
  • Co-location,
  • Backup (outsourced),
  • Licenses and renewals,
  • Latest solutions (comprising of hardware, software and other regular expenses).


As stated earlier, this category is solely dedicated to long term plans and projects that you are planning for the coming years; more appropriately, for the next business year. All kinds of updates, infrastructural changes, transitions, replacements and replacements will be a part of this category. Some of the most common aspects that are covered in this segment are:

  • Project planning,
  • Project execution,
  • New equipment,
  • New software.

Generally, IT budgets are susceptible to changes. This is because not all organizations can cover the expenditures related to IT. Given the very nature of IT budgets, they fluctuate to a great extent. However, these turbulences and variations can be coped with proper planning.

Article Name
What Makes Up an IT Budget
A budget is a quantitative expression of a plan for a defined period of time. It may include planned sales volumes and revenues, resource quantities, costs and expenses, assets, liabilities and cash flows.