Investing in Construction Technology – A Guide to IT Budget Planning  

An IT budget typically covers a wide range of expenses related to technology infrastructure, maintenance, and growth.  

By considering all of the costs associated with digital transformation, your teams can more accurately forecast and plan based on your available budget. 

Key components to include when planning an IT budget are: 

1. Operational Expenditures (OpEx) 

Ongoing costs for day-to-day IT operations, such as software renewals, support services, and communication tools. 

2. Personnel Costs 

This includes salaries, benefits, and the cost of training or upskilling IT staff to ensure they remain proficient in evolving technologies. 

3. Hardware Expenses 

Costs associated with purchasing, maintaining, and upgrading essential IT infrastructure like servers, networking equipment, and storage devices. 

4. Software Expenses 

Expenses related to acquiring and maintaining software licenses, including productivity tools, SaaS solutions, and security. 

5. Project Expenditures 

Budget allocated for specific IT initiatives, such as system upgrades, software development, or digital transformation projects. 

6. Capital Expenditures (CapEx) 

Large investments made to purchase or improve long-term technology assets that bring significant value to the organisation. 

7. Cloud Services and Subscriptions 

Costs for outsourced IT services, managed services, cloud computing, and data hosting that support business functions. 

8. Contingency and Miscellaneous Costs 

A reserve budget set aside for unexpected IT-related expenses, ensuring flexibility to address unforeseen issues or emergencies. 

Every organisation will have their own way to budget and plan, based on their stakeholders and structure.  

Below, we have highlighted the key steps we think every construction business should have at a minimum when it comes to planning their IT budget.  

Use this as a basis for checking you’ve been thorough, as a clear and structured approach to IT budgeting can help you make informed decisions on technology investments that drive growth.  

Step One - Identify Your Goals 

Define what you want to achieve through digital transformation. Having a good understanding of the business’ overall goals is a good starting point, then identify how IT investment could help achieve those goals.  

This could include hiring IT staff to manage workload or investing in a centralised ERP platform. 

Step Two - Assess Existing Systems and Needs 

With a preliminary idea of what’s on the cards, it’s time to review your current technology infrastructure. This will help you to identify gaps and inefficiencies. Evaluate which tools are outdated, underutilised, or lacking critical features.  

Step Three - Involve Key Stakeholders 

This step could also be called ‘2.1’, as it is never too early to involve wider teams and stakeholders in your planning. Collaborating with leaders can help you gain a holistic view of overall technology needs. Meanwhile, conversations with the wider team can highlight IT weaknesses you may not have been aware of.  

These insights will help you prioritise investments that address company-wide challenges. 

Step Four - Assess Historical IT Costs 

Analysing previous IT spending patterns is a great baseline for knowing what is to come. This is especially useful to understand ongoing running costs of IT, prior to making any changes and where money has been invested. Use this information to identify areas of overspending or underfunding. 

Step Five - Categorise Your Costs 

Break down your IT expenses into categories, such as hardware, software, training, and maintenance, as we detailed in the section above. This helps clarify where your budget will be spent and keep things transparent. 

Step Six - Map Out Your Cost Allocation 

Distribute your budget based on business priorities, ensuring essential projects receive adequate funding. Take into account estimated timelines, resource requirements, and desired outcomes.  

Marrying these considerations with your overall business goals will help your team identify the most appropriate course of action. 

Step Seven - Create a Contingency Plan 

Unfortunately, things don’t always go to plan. Allocate a portion of your budget to cover unexpected costs, such as software upgrades or emergency repairs, to maintain business continuity. 

This ensures you are not crippled by any unforeseen events and also gives peace of mind to your investors and stakeholders. 

Planning an IT budget for digital transformation in construction can be challenging, especially with so many moving parts.  

Now you’re equipped with a step-by-step, here are some final considerations and challenges to prepare for, and how to overcome them: 

1. Unclear Objectives 

Solution: Align IT spend with measurable business outcomes. Ensure every IT investment directly supports your core goals, like improving efficiency or project management. 

2. Resistance to Change in Costs 

Solution: Be flexible and review the budget regularly. Adjust the budget as needed to accommodate changing costs and business needs. 

3. Bad Communication 

Solution: Bring teams in early and be transparent. Regular communication between IT, finance, and other departments ensures alignment and prevents misunderstandings. 

4. Being Unaware of Hidden Costs 

Solution: Ask the right questions with vendors. Clarify all potential hidden costs, like ongoing fees or maintenance, before finalising deals. 

5. Not Considering Total Cost of Ownership (TCO) 

Solution: Consider lifetime costs, such as ERP subscription fees. Look beyond initial costs and factor in long-term expenses like maintenance and upgrades. 

6. Lack of Integration 

Solution: Choose digital tools that openly integrate with your wider business. Ensure your existing systems can seamlessly connect with newer tools for smoother workflows.