Technology Budget Planning in 2022 is a MUST for all law firms, regardless of your size
Law firms benefit greatly from technology budget planning.
Benefits of Budget Planning
- Determine and assess your financial health – Are you meeting your business goals?
- Develop a strategic plan – Do you understand your IT needs, so that you are able to make the right technology investment decisions?
- Better preparation for your taxes – Do you have a firm grasp on all of your technology spending for accurate reporting?
- Financial decision making – Do you know how much to allocate for your current and future technology needs?
However, despite these benefits, roughly only half of law firms are making it a priority.
However, that seems to be changing as of late. According to Law Technology Today, “Solos and small firms continue to lag behind the larger firms, with only 43% of solo and 50% of small firms responding that they budget for technology. The good news is 62% of solo firms increased their technology budget for 2021.”
If you’re one of the remaining small to medium-sized firm that hasn’t yet started planning for your technology, here’s a quick way to begin. Please note that having a vCIO to guide you through the process, will help rapidly accelerate your efforts.
Get your Technology Budget Started with These Action Items:
- Identify the person in your firm who understands your spending, and has access to your financial records.
- Ask them to pull all spend related to technology for the past 3 years, and what you’re spending today. This will help establish an IT spend baseline.
- Review your IT strategic roadmap*, preferably with your vCIO if you have one. Roadmaps are essential to understanding and planning for your current and future IT needs. A good vCIO will help you make the best technology investments for your firm.
- Align your technology needs with your business goals. Investing appropriately in technology will help boost your firm’s operational efficiency, cybersecurity, and profitability.
- Set your IT priorities for the next 1-3 years. This allows you to assess the associated costs, so you can start budgeting and avoid costly IT surprises in the future.
*Just a side note that IT strategic roadmaps are integral to the budgeting process. If you don’t know what your needs are, it will be virtually impossible to plan your spending. If you don’t have a roadmap, consider taking an IT Assessment and working with a managed services provider to create one.
The Value of IT Assessments
IT assessments lay the foundation for a strategic roadmap because they clarify where your technology stands and your current needs, vulnerabilities, and gaps. It will also highlight which technology to invest in to remain efficient and secure.
For example, an assessment will review your infrastructure, hardware, software, cybersecurity and more, and ask the following:
- Do you have equipment that’s at end-of-life and will need replacing in the next 1-2 years?
- Does your infrastructure need any major upgrades?
- Are you due to pay for new software release or upgrade?
- How can you increase your cybersecurity maturity to stay protected against today’s cyberthreats?
The process to setting up a technology budget or incorporating it into an existing internal budget can be arduous and overwhelming. Again, this is where having a vCIO on your team will pay off. They’ll help implement a strong foundation for technology investments using beneficial tools such as an IT assessment, a strategic roadmap, and knowledge of where to prioritize your spending.
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