7 Key Questions for IT Budgeting for 2025

Is your business getting ready for a healthy and vibrant 2025?

In today’s world, that includes developing a strategic IT operations budget that aligns your IT roadmap with your business goals and takes into account the current economy and the most relevant changes in the technology landscape.

For mid-market companies, generative AI (GenAI), cybersecurity, and belt-tightening are the top budgeting issues to address in 2025’s budget.

Look at developing an IT operations budget that strikes a balance between all three — embracing GenAI and the modernization it requires, bolstering cybersecurity strategies in response to evolving threats across your attack surface, and optimizing (and consolidating) vendor relationships while focusing on efficiency for optimal ROI.

Where do you start? Answer these seven questions:

1. Have you synced up with your CEO about 2025 growth projections?

How bullish is your CEO on the next 12 months? Will you aggressively market new products and services and possibly hire more people, or are you taking more of a wait-and-see approach to growth?

KPMG reports that CEOs of large companies remain confident in the U.S. economy’s growth prospects but are making strategic adjustments to address a combination of near-term risks and structural changes.

At Leapfrog, we’re seeing a mix of approaches from our mid-market clients, with more taking a wait-and-see approach for 2025, especially among our Private Equity client base.

2. Will your core infrastructure costs hold steady or increase in 2025?

Have conversations with your vendors to get an idea of what to expect — don’t use last year’s numbers. Inflationary price increases are continuing, and prognosticators as reliable as Jamie Dimon say they’re preparing for a broad range of inflation possibilities in 2025. So it’s likely that your vendors are doing the same.

Additionally, the need to add technologies, such as cloud services and cybersecurity enhancements, will increase the annual cost of running a secure IT operation that can support growth.

3. Are your IT inventories — your assets, vendors, and subscriptions — all up to date?

It’s important to have accurate inventories of all the pieces that comprise your IT ecosystem, along with their end-of-life dates, for accurate lifecycle planning. Make sure to include shadow IT and any endpoints deployed for remote workers during COVID. Running IT operations that are streamlined and efficient is key for 2025, and lifecycle planning during inflation will take extra consideration and, potentially, negotiation and further research.

Your 2025 budget must fund the updates, replacements, and renewals needed to maintain the production quality your business and clients require.

4. What is your current level of technical debt?

As part of your 2025 IT budgeting process, conduct a detailed analysis to identify your technical debt level and the assets driving it. If you’re like most companies, technical debt is impacting IT performance, scalability, or resilience. Typically, a small number of assets account for most of a company’s technical debt — budget to resolve this debt first. Technical debt increases your business costs and risk. Ignoring it only digs the hole deeper.

5. Do you know the latest cybersecurity threats to your IT environment?

Understanding where your most significant cyber risk originates is critical to safeguarding your business continuity and protecting your company from financial loss from breaches and attacks. Due to the dynamic and evolving nature of cyber threats and the strategies to combat them, the security measures in place even a couple of years ago are no longer sufficient. But remember not to outspend your risk. Prioritize reducing the most likely risks and insure the rest.

Leapfrog recommends, at the very least, budgeting to resolve your company’s top five risks next year.

6. What will it take to modernize your IT for GenAI?

GenAI helps streamline operations, enhance customer experiences, and further innovation. Plus, employees who know how to use GenAI effectively complete their work faster, delivering improved ROI.

However, before you can reap these benefits, you need to modernize your infrastructure so AI can access your data. It’s possible to connect AI to your legacy data sources, but it’s cheaper and easier to manage your environment if you use cloud solutions that AI can leverage more easily. Allocate funds to roll out GenAI methodically and securely to avoid potential pitfalls and include the cost of developing an AI policy and training employees.

7. Have you updated your IT roadmap for 2025?

Your IT roadmap, the holy grail for business-growth planning in the digital era, reflects the answers to the above questions and more. It gives an overview of your IT environment’s current state and represents your strategic-level IT planning for the next few years.

By aligning your planned IT improvements and projects with your business strategy, your roadmap will reflect your 2025 business priorities and refresh the future-state vision of your IT infrastructure. If you still need to update your roadmap for 2025, now is the time.

It’s easy to see why you will need to do more than dust off last year’s budget for 2025. To prepare for a healthy and vibrant year, you need to adapt your IT operations budget to meet the moment. And you’ll need to do the same thing next year and each year after that.

Since 1998, Leapfrog has helped hundreds of clients develop IT operations budgets that support their business objectives.

We provide a budget forecast for the coming year, inform you about IT trends (including tools, solutions, cybersecurity issues, and more), and offer alternative design and component recommendations when needed. We also offer fractional CIO services to lead your budgeting process and can recommend specialized, third-party services if you need industry-specific strategies, including custom software development.

Please get in touch with us if you’d like to learn more about how your IT operations budget can drive your business growth while keeping your IT attack surface secure. Helping clients get the most out of their IT budgets each year is a core value at Leapfrog.