Managed service providers (MSPs) often get overlooked during budget forecasting discussions, as they are seen more as “fixers” than strategic planners. However, MSPs can provide valuable insights, benchmarks, data, and reference experience to project IT costs effectively. Here are three ways MSPs can assist in forecasting IT expenses for the upcoming year:
- Leverage Capex/Opex Accounting Rules: In the past, businesses invested heavily in IT hardware, making it easier to distinguish capital expenditure (Capex) from operating expenditure (Opex). Nowadays, with the shift towards cloud computing, the focus is on supporting strategic initiatives rather than large-scale infrastructure investments. MSPs can help optimize IT spending by aligning Capex and Opex with business goals and priorities.
- Correct Legacy Issues: Many companies struggle with complex IT landscapes that consume more resources than necessary. They allocate insufficient funds to address legacy issues, leading to a cycle of maintaining the status quo while neglecting modernization. MSPs can aid in identifying critical needs, enabling businesses to allocate resources to address legacy challenges and support future-focused projects.
- Plan for the Future: Instead of solely focusing on immediate needs, IT budgets should include a vision for the next several years. Top CIOs plan for 3 to 5 years ahead, aligning budget allocation with long-term objectives. By looking into the future, businesses can allocate funds more strategically, ensuring they are prepared for upcoming advancements and developments.
With the assistance of MSPs, businesses can build IT budgets that not only support current needs but also align with long-term goals and foster innovation. MSPs provide the expertise and strategic guidance required to make informed decisions, allowing businesses to optimize their IT spending and drive success in the digital age.