2025 is coming to an end, and that means businesses across the globe are beginning to look at their technology budgets for next year. This is one of the most important things you can do to secure your company’s future. The choices you make here will decide which investments you make, how strong your defences are, and ultimately, how competitive you will be.
But getting started can be difficult, especially if this is your first time creating a budget for technology or if resources are stretched particularly thin. This step-by-step guide will walk you through the process, helping you create a budget that positions your business for success in 2026.
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1. Understand Your IT Environment
To develop an effective technology budget, you must first identify where money is currently being spent. Without this crucial information, you will have no idea how to spread out your financial resources more efficiently. Conduct a full inventory of your IT assets, including:
- Hardware
- Software licensing
- Cloud services
- Subscriptions
- Security measures
- Staffing costs
Keep note of how much is being spent on each asset, including purchase, maintenance, repairs, and upgrades.
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2. Investigate Use
Once you have a complete list of every IT asset your company owns, it’s time to identify how they are being implemented into business operations. Perform an audit to identify how many staff are using each asset, what it is being used for, and how often. This will allow you to spot issues such as:
- Multiple subscription services that accomplish the same thing
- Extra storage space that you are not using
- Assets that have become redundant as your business has grown
- Outdated equipment that costs more in maintenance than the value it provides
- Services that seemed exciting at the time or address one very niche problem, but are not valuable for day-to-day tasks
3. Get in Touch With Your Goals
One of the most common mistakes that businesses make is placing their IT in a silo. It is treated as a separate entity from the company, and not an essential part of it. This inevitably results in thousands of dollars being wasted, as initiatives are supported that seem like a good idea, but do not drive the needle.
To fix this, you must bring your IT back into alignment with the rest of your business. Identify your goals. Do you want to expand into a new market, improve customer satisfaction, or increase sales? Then, determine how technology can help you move towards these specific goals.
Read our 2025 budget guide to learn more about business-IT alignment
4. Make Some Difficult Choices
With all of the data you have collected, it is time to write your information technology budget. Start with cutting unnecessary expenditure. This may mean you need to make some hard decisions. An expense should only stay if:
- It solves an immediate problem
- It actively drives your business towards growth
- It provides something important that no other asset can
- It is an essential part of your workflows
Anything that does not fulfil at least one of these requirements should be cut. It is not necessary, and is only holding your business back.
Next, you must determine what is worth spending money on. Refer back to your goals. Which investments will help bring you closer to them? Which will solve your most pressing challenges at this moment in time? This is where you should be spending.
5. Plan for Emergencies
Your budget should not rely on everything going perfectly at all times. This rarely reflects reality, and will leave you out-of-pocket when something does go wrong. Plan ahead for unexpected emergencies, such as:
- Cyber-attacks
- Outages
- Sudden staff turnover
- Equipment breakdowns
- Unexpected workload increases
Including a buffer for these incidents may seem like a waste, but it is actually a very intelligent investment in your financial future. During an emergency, it could save your business thousands of dollars. Account for the costs associated with threat response, recovery, business continuity planning, and potential legal problems.
6. Revisit and Adjust
Your budget should be a living document that changes with your needs and objectives. You may realise halfway through the year that your priorities have shifted, and as such your planned investments are no longer suitable. It’s important to keep track of spending as the year progresses, check in with your goals, and ensure that everything is still in alignment.
FAQs
What is a Technology Budget?
Your technology budget (sometimes referred to as an “Information technology budget”) is used to control expenditure across your IT infrastructure. This prevents you from wasting funds on initiatives that don’t matter, while prioritising those that contribute real value.
How Can I Get Started With Information Technology Budget Planning?
Begin your information technology budget planning with a thorough inventory of all existing IT assets. This will give you a baseline, allowing you to accurately determine where gaps exist and where you might be overspending.
What Should be Included in a Technology Budget for Schools or Law Firms?
When creating a school or law firm technology budget, security and compliance are a much bigger concern. Put additional money aside for security measures and disaster recovery.
How Often Should I Review My Technology Budget?
Ideally, your technology budget should be reviewed quarterly or after any major changes within your business. This allows you to adjust quickly and keep spending on track.
Should I Use Information Technology Budget Templates?
Information technology budget templates, in Excel or another favoured software, can significantly streamline the process by ensuring that nothing important is forgotten and the same process is used each time. You can either find a template online, or create your own.
Streamline Your Budget Process and Enjoy Massive Cost Savings
Effective IT budgeting is a non-negotiable for any business seeking long-term success. Without it, you risk wasting funds on unnecessary technology and failing to invest in mission-critical solutions. A well-defined plan that accounts for every scenario allows you to make informed financial decisions that align with your business goals and support growth.
National IT Solutions understands that cost management is at the heart of every successful business. That’s why we’re helping SMBs make smarter and more cost-effective IT decisions that drive real value and support the overall business strategy. For more advice, read our blog on essential cloud cost management strategies.