Budgeting for new digital technology acquisition

This checklist is designed to help you think through the major elements of the budget for major new digital technology.
Budgeting for tech systems acquisitions

So, you're looking at investing in a new digital technology? It could be your server, client management system, CRM, website redesign or finance system. It's important that you take into consideration all the costs that may not be obvious at the start. To help you, we have developed a checklist you can use as a starting point for creating a budget, the systems acquisition budget checklist

The systems acquisition budget checklist will help you develop a budget for the complete process of acquiring a new digital technology. It’s not a primer for systems acquisition or general budgeting. But it will prompt you for the things you need to consider when working out what it will cost to acquire a new digital technology system.  

It’s easy to underestimate the effort and costs involved when preparing your budget. The checklist will help you think about all the relevant activities and costs. It’s been designed to provide a clear way of presenting the processes, what needs to be purchased, what support is required and what it will cost. What you’ll need to include will vary depending on the nature of the system - for example whether it is for service delivery, financial, email and so on.

Budget checklist

This checklist is designed to help you think through the major elements of the budget for a new digital technology.

There are 3 steps in new digital technology acquisition:

  1. Figuring out requirements: listing what you're trying to do and the issues you're trying to solve
  2. Selecting the appropriate digital technology: finding the right system to match your requirements. 
  3. Implementing the solution: once you've decided which system you need, it's time to install and set it up. In the implementation costs we mainly have vendor costs and internal costs.
  • System implementation: vendor costs
    • Licence fees: for main system and ancillary systems such as separate report writers (costs may be ongoing, and/or there may be one-off charges)

    • Vendor implementation: e.g. system configuration, customisation, setting up reports, testing, data migration, training. Ensure you include integration with other systems and development/enhancement costs if required

    • Infrastructure and hosting setup: for main system and ancillary systems such as report writers.

    • Travel and/or Related Expenses

  • System implementation: internal costs
    • Implementation support: to load information about your clients into the system, support the setup of key forms and reports, assist with training, etc.

The list, a checklist of items that are sometimes overlooked, is not exhaustive. It’s grouped by project stage, but many organisations will have costs in the first four areas that occur across many (or all) of the subsequent stages.

  1. Project management
  2. Backfill: to cover the costs of backfilling staff who are dedicated part or full time to the project
  3. Travel: to develop requirements, bring people together for the vendor demonstrations, decide on the system, etc.
  4. Contingency to cover unforeseen expenses such as functionality, reports or training that weren’t identified in the early stages of the project but are critical for the organisation.
  5. Advice: including external consultants and business analysts
  6. Legal advice on the contracts

Ongoing costs

  • Licence, and maintenance fees: for main and ancillary systems
  • System support: for main system and ancillary systems
  • Hosting: for main system and ancillary systems (especially if hosted on your infrastructure)
  • System development and enhancement: if you may require additional new features
  • Additional licenses: if you anticipate growth
  • System specialist: a dedicated staff member or external person, part- or full-time, supporting the system to configure reports, train and support users, and so on.

 

Download our digital technology-acquistion-budget-template.xlsx

 

Read next

How to develop your annual technology budget

How to choose a new information system

What is a requirements gathering process?

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