Replacing servers, desktops, and infrastructure equipment is essential for the smooth running of any network, regardless of size or complexity. In an ideal world, budgeting and forecasting is driven by your customer, but if not, it’s your responsibility to engage with them and have those conversations.
This means that anticipating your customers’ technical needs is not just great for your customers, it’s also great for you, as it can help you unlock a stable form of income for your managed services business.
IT forecasting and budgeting strategy
Effective budget forecasting and expansion planning doesn’t happen on its own, it’s something you must actively pursue. Failing to plan effectively will make it harder for your customers to pay for the basics when they are due for renewal. But how do you manage the IT budgeting process, what is involved, and what are the best practices?
In this blog, we’ll set out some of the main things you can use to get the process working correctly.
- Quarterly meetings
Every quarter, you should book a meeting with the decision makers in your customers’ organizations. Part of the agenda for that meeting should be to discuss any up-and-coming renewals for their hardware or software. These meetings also give your customer an opportunity to discuss any issues or expansion plans they have. You can guide them in the right direction and even suggest different ways of doing things.
Keeping on top of your customers’ needs and managing potentially hundreds—or even thousands—of desktops and servers is going to need some professional tools with excellent reporting capabilities. For smaller networks, you can make use of a simple IT forecasting and budgeting Excel template to help map out the next year or two.
For larger networks, you need a fully featured remote monitoring and management (RMM) tool to track and audit your customers’ network and devices. Retrieving installation dates from devices using reports is an easy way to forecast equipment replacements.
Professional services automation (PSA) tools will enable you to better manage recurring renewals, such as SSL certificates, domains, software, and hardware licensing, and at the same time allow you to easily schedule work and manage project planning. A PSA tool will also allow you to run off budget reports based on the renewal dates for existing subscription products, giving you a baseline to work from and adjust for growth.
- Hardware refresh policy
All desktops and servers have an expected lifespan of three to four years, but customers will often drag this out or even wait until equipment fails, depending on the value they place on having an efficient and working IT system. From a support perspective, hardware should be replaced before its warranty expires and if not, then it’s an opportunity to sell an extended warranty and ensure the customer can get up and running quickly when something does fail.
- Software upgrades
As with hardware, software will have an expected shelf life. Not just because new versions will come out with new features that may be useful to the business, but also because support may not be available for older (legacy) versions if a customer decides not to upgrade. List out all your customers’ existing software and set out an upgrade cost, alongside a rough project implementation cost. Then have the discussion with the customer about when you and they would reasonably expect to upgrade them.
Warranty renewals allow for the fast repair of failed hardware. The faster you can get devices up and running again, the better the service you will be giving your customers. Warranties are also a great source of recurring revenue into your business. Use your RMM tools to run off device warranty reports. Budget for warranties 60 days ahead of them expiring and bring these to your customers’ attention and arrange their purchase during your quarterly customer meeting.
- Hardware/software as a service
Any software or hardware sold as a service on a monthly subscription is great for forecasting and budgeting. You can easily forecast the costs because there is a set monthly fee allowing you to adjust for additional users or features and implement those costs into your customers’ budgets. Office 365, firewalls, and even PCs and servers obtained on a lease allow for predictable costs.
- The three-to-five year plan
Having a long-term goal helps you to plan for larger expenses, leaving you and your customer fully aware of what’s being planned. Things such as new server upgrades and replacement phone systems are all items that can be planned for easily for business with gradual growth. Some businesses will grow rapidly so long-term forecasting will always be subject to change, but at least planning these expenses now puts everyone on the same page.
Forecasting your customers’ needs is essential for budgeting, and budgeting allows your customers to prepare for upcoming expenses. Use your RMM and PSA tools to manage and plan for hardware and software renewals. Book regular meetings with your customers to discuss up-and-coming renewals and to discuss and plan growth plans as well as the implementation of new technologies. All this results in an easier sell for you and supports regular income to your IT support business. Your customers’ networks run faster and with fewer issues, it’s a win all around.
Ian Waters is a senior partner at MSP Southern IT Networks Ltd and works as the technical director. Ian has been working in IT for over 15 years since finishing his degree in computer science and artificial intelligence. An Office 365 expert and author of the book, Microsoft Office 365—Exchange Online Implementation and Migration—Second Edition. You can follow Ian on his personal blog here.
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