Your budgets must not only reflect short-term strategic plans but also drive innovation
Every practice owner today is confronted by the real threat of new technologies that interrupt business as usual. By changing their approach to IT budgeting from merely an annual “make it fit” approach into a meaningful planning and ongoing management process, they transform IT from a resource drain into a fruitful investment.
The initial purchase is just a fraction of the equipment “life cycle”. Understanding hidden technology costs can help reduce unnecessary expenditures, eliminate expensive downtime, and create an effective budget.
Before you invest in new IT projects, we encourage you to evaluate your spending history and implement best practices that will improve your bottom line and patient care.
Pull invoices and records from the last 4 years related to hardware/software expenses to serve as a planning tool. Count depreciation costs, including initial hardware and software purchases or lease costs, along with software licensing, subscriptions, support or maintenance contracts, backup solutions, extended warranties, set-up fees, and parts. Divide total costs by four to get an estimated annual “Total Cost of Ownership” (TCO) representation.
Include all labor costs for IT services, such as IT management, tech support, email management, business continuity arrangements, website maintenance, helpdesk, onsite service, cloud services etc. If you work with an IT provider, add up those payments and fees. Also include facilities costs such as internet connectivity and software/hardware training for staff.
This is the most problematic to measure but represents a significant percentage of the TCO due to employee frustration and productivity lost. Estimate the number of hours each month that someone spends directly managing the IT, dealing with computer issues, self-training staff or self-learning, and multiply by the average hourly wage (plus benefits). This will give you an average monthly cost.
Include any projects planned for the coming year and one-time changes to your environment that do not happen every year. Industry standards suggest that computers, laptops and servers should be replaced about every four – five years. Make sure that you include labor costs as well.
Call us to learn how we can help you plan and budget for your technology.
Ensure IT strategy is aligned with your business goals, resulting in the right IT investment decisions. Include a “growth” goal that includes interactivity with patients.
This may be the time to work with your CPA. Identify how different execution scenarios might impact the practice’s IT budget and cash flow.
The IT budget is often treated as just one big mass. Include these three components when you step back and look at the big picture. Include one month’s worth of your practice’s IT support and maintenance cost to offset any IT emergencies.