IT Budget Planning Template
A structured template for planning your annual IT budget — covering hardware, software, services, and contingency.
Purpose of an IT Budget
An IT budget aligns technology spending with business goals. For Indian SMEs, a well-planned IT budget prevents cash flow surprises, ensures critical renewals are never missed, and provides data for investor due diligence. This template covers the five major categories of IT spending.
1. Hardware Budget
| Category | Budget Allocation | Planning Notes |
|---|---|---|
| Laptops / Desktops | 40-50% of hardware budget | Plan for 20-30% annual refresh of aging fleet. Budget ₹50,000-₹80,000 per standard laptop. |
| Servers / Infrastructure | 15-20% | Server refresh every 4-5 years. Factor in cloud migration costs if applicable. |
| Networking | 10-15% | Switches, routers, APs, cabling. Plan for office expansions and speed upgrades. |
| Peripherals & Accessories | 5-10% | Monitors, keyboards, docking stations, headsets for new hires and replacements. |
| UPS / Power Backup | 5-10% | Battery replacement every 2-3 years. New UPS for new offices or capacity expansion. |
2. Software & Subscription Budget
List every SaaS tool, software licence, and subscription service the company uses. For each item: monthly/annual cost, renewal date, number of licences, and annual cost increase percentage (most SaaS vendors increase 5-15% annually). Track total software spend as a percentage of revenue — for most SMEs, 2-5% is healthy, above 7% warrants optimisation.
3. Services & Consulting Budget
Include: AMC contracts for printers, UPS, and AC units (typically 8-12% of equipment value per year), IT support retainer or managed services provider fees, cloud infrastructure costs (AWS, Azure, GCP — often 15-30% annual growth), and consultant fees for compliance audits, security assessments, or ERP implementation.
4. Contingency Reserve
Set aside 10-15% of the total IT budget for unplanned expenses: emergency hardware replacement, security incident response, compliance penalty or remediation, and urgent software purchase for an unexpected business need. If the contingency is not used in a quarter, it rolls forward — do not treat it as "use it or lose it."
5. Budget Review Cycle
Annual budget planning in Q4 for the next financial year. Quarterly review of actual vs planned spending — adjust remaining quarters based on business changes. Monthly monitoring of subscription renewals to avoid auto-renewal surprises.
Put this into practice with workro desk.