A good IT budget isn’t just a spreadsheet; it’s a strategic tool and should reflect where your business is going. If you’re still treating IT as a cost centre, you’re missing the point, technology is central to running a business, customer experience, operational efficiency, and competitive advantage.

We’ve included a downloadable Excel IT budget template to help you get started. The template is just a tool to help you get started, what matters is how you use it.

Budgeting for IT is a Strategic Exercise

There’s a tendency to treat IT budgeting as a finance task however, to be effective it should really sit with your leadership team. The decisions you make here will shape how your business performs, grows, and remains cybersafe.

A strategic IT budget should:

• Be directly tied to business goals
• Anticipate risks and regulatory shifts
• Include investment in innovation, not just maintenance
• Be flexible enough to adapt, but firm enough to guide decisions

If your IT budget doesn’t do these things, it’s not strategic, it’s reactive.

The Framework We Recommend (And Use Ourselves)

We’ve worked with dozens of organisations, some scaling fast, others stabilising after growth; and this framework consistently delivers clarity and confidence.

Start With a Retrospective

Begin by reviewing last year’s spend. Not just the totals, but the context. What did you spend on:

• Infrastructure and licensing?
• Projects and upgrades?
• Security and compliance?
• Emergency fixes or unplanned work?

This isn’t just about benchmarking, it’s about understanding where your money went and whether it delivered value.

Align With Business Strategy

This step is non-negotiable. Your IT budget must reflect the organisation’s strategic direction. That means sitting down with department leads, understanding their priorities, and translating those into technology requirements.

For example:

• If marketing is planning a major campaign, do you need to scale infrastructure?
• If operations are automating workflows, what platforms are required?
• If compliance is tightening, are your security tools fit for purpose?

Don’t guess, ask, then budget accordingly.

Categorise Spend into Run, Grow, and Transform

This model works because it’s simple and intuitive.

• Run: The essentials; keeping systems operational, maintaining licences, supporting users.
• Grow: Enhancements; new tools, integrations, capacity upgrades.
• Transform: Strategic change; digital transformation, cloud migration, AI adoption.

Every line item should sit in one of these categories. If it doesn’t, ask why it’s there.

Forecast With Precision, Not Optimism

This is where many budgets fall apart, don’t under-budget to make the numbers look good, be realistic. Include:

• Licensing and renewals
• Hardware refresh cycles
• Security upgrades
• Training and change management
• IT support for your team
• Contingency for unknowns (we recommend 10%)

If you’re unsure about a cost, estimate conservatively, it’s easier to reallocate surplus than to justify overspend.

What to Avoid (Because We’ve Seen It Go Wrong)

There are patterns we’ve seen repeatedly. Avoid these:

• Ignoring security: It’s not optional, underfunding/underinsuring here is a liability.
• Over-relying on legacy systems: They’re often more expensive than modern alternatives, especially when you factor in downtime and support.
• Budgeting in isolation: IT doesn’t operate in a vacuum, cross-functional input is essential.
• Treating innovation as a luxury: It’s how you stay competitive.

We’ve built a practical Excel template that reflects this framework. It includes:

• Pre-set categories for Run, Grow, and Transform
• Forecasting formulas
• Space for notes, assumptions, and stakeholder input

It’s designed to help you build a budget that actually works.

Need Help? Our vCIO Can Guide You Through It

Budgeting is just the start. If you want to build a technology roadmap that supports your business strategy, our virtual CIO service is designed for exactly that.

We work with leadership teams to:

• Align IT spend with business outcomes
• Identify cost-saving opportunities without compromising performance
• Build resilience into your tech stack
• Plan for innovation, not just maintenance

If you’re serious about making technology a strategic asset, not just a line item, let’s talk.

Book a Session with Our Team