As the third quarter is closing and the final stretch of the year approaches, many business leaders find themselves focused on wrapping up projects, meeting revenue goals, and preparing for a strong year-end finish. Yet, this season is also one of the best times to pause, step back from the daily grind, and plan for the new year ahead.
For technology leaders, that means not only setting goals for 2026 but also creating a thoughtful budget that outlines planned investments and forecasts operational expenses. Whether you’re new to the process, want to benchmark your practices against peers, or simply need fresh ideas to refine your budgeting approach, this guide will help you shape a practical, forward-looking IT budget.
Where to Start: Reflect Before Putting Pen to Paper
The budgeting process begins with reflection. Take a close look at your 2025 budget and evaluate how it has performed year to date. Are you ahead of plan or trailing behind? Have certain assumptions proven inaccurate? Were there unexpected gaps or oversights that disrupted execution?
An honest clear-eyed review of the existing budget offers two benefits: 1) it highlights lessons learned and 2) provides a solid baseline for forecasting the year ahead. Without this checkpoint, you risk repeating mistakes or overlooking important variables that will affect your 2026 financial planning.
Subscription Review: Managing Recurring Technology Costs
The technology sector has largely shifted to an “as-a-service” model, where solutions are delivered through recurring subscriptions. While this can simplify deployment and provide predictable costs, it also demands careful oversight.
Start by identifying all subscription agreements across your organization. Which are due for renewal in 2026, and what are the terms? Do they auto-renew, or do you need to provide written notification to terminate? These details matter, as missed deadlines can lock you into contracts that no longer meet your needs.
Equally important is evaluating vendor performance. Has the provider delivered on their promises? Are service levels satisfactory, or are you fielding frequent complaints about poor performance, lack of bandwidth, or unexpected overages? When renewals approach, consider whether to extend, renegotiate, or switch to a superior solution.
Subscription management is not just about cost control—it’s about aligning services with business needs and ensuring the right scale and quality for your operations.
Lifecycle Review: Planning for Hardware and Infrastructure
Even in an era of cloud services, businesses still rely heavily on the infrastructure within the premises. And unlike subscription models, hardware comes with finite lifecycles.
- Endpoints (smartphones, tablets, laptops, desktops): Typically, 3 years
- Servers | Storage: Around 5 years
- Network (routers, switches, access-points): 7 years
- Premises telephone systems: 8–10 years
Understanding where each piece of equipment stands in its lifecycle helps you anticipate replacement needs, avoid sudden failures, and maintain warranty coverage. Keep track of critical milestones such as “end of sale,” “end of support,” and “end of life” notices, since these directly affect security, compliance, and reliability.
Don’t forget building systems often outside IT’s direct oversight—such as access control, HVAC, smart lighting, and surveillance. These depend on hardware that is often “set it and forget it” until something fails. Budgeting for proactive upgrades here can prevent costly downtime later.
Cybersecurity: Staying Ahead of an Arms Race
Cybersecurity planning deserves its own budget category. Unlike other IT investments with predictable timelines, security operates in a constantly shifting landscape. Cybercriminals are relentless in developing new tactics, while defenders continuously innovate to counter them.
This arms race means organizations must regularly evaluate whether their security posture is sufficient. Are there emerging threats your current tools don’t cover? Are there new technologies—like advanced endpoint protection, zero trust architectures, identity services or managed detection and response services—that should be added to your defense?
Budgeting for cybersecurity is not a one-time line item; it’s an ongoing commitment to strengthening your resilience against evolving threats.
Tools That Make Budgeting Easier
A range of tools can simplify the budgeting process by giving you better visibility into your environment and upcoming needs:
- Warranty Management Tools to track coverage and expirations
- Remote Monitoring and Management (RMM) software for proactive oversight
- Manufacturer purchase history databases for lifecycle tracking
- Migration path documentation that outlines what’s next for specific platforms
- Cybersecurity assessments to identify gaps and prioritize investments
- Automated infrastructure inventory scans to catalog assets
- Wi-Fi surveys to pinpoint performance issues and capacity needs
Leveraging these tools ensures your budget is based on accurate data rather than guesswork.
Best Practices for Building a Sustainable IT Budget
Budgeting is not just about numbers on a spreadsheet—it’s about creating a framework that aligns IT investments with business priorities while minimizing surprises. Here are some suggested best practices:
- Offset Hardware Refresh Cycles
Instead of replacing all hardware in large, costly waves, spread refreshes across multiple years. For example, replace one-third of your equipment annually or less aggressive 20–25% each year. This interval approach smooths expenses into predictable recurring investments, reduces the shock of large capital expenditures, and ensures your environment stays current and under warranty | support.
- Review Cybersecurity Insurance Policies
Insurance providers increasingly require proof of robust security controls. As you renew policies, identify areas where your current posture may be seen as a liability. Completing those projects not only strengthens your security but also reduces your premiums, turning risk mitigation into a cost-saving opportunity.
- Invest in Training
Technology is only as effective as the people using it. Too often, employees use a fraction of the extensive feature sets available in business applications. Allocating funds for end-user training—both for new technologies and for deeper adoption of existing platforms—helps maximize return on your IT investments.
- Build in Flexibility for the Unexpected
Even the best-planned budgets face surprises. Pricing changes, vendor-driven adjustments, integration challenges, and interoperability issues can all increase costs. A good rule of thumb is to allocate an additional 15–20% for contingencies. This cushion allows you to absorb unexpected expenses without derailing other initiatives.
Looking Ahead: IT as a Strategic Enabler
Budgeting for IT expenditures should not be seen as a reactive, tactical chore. Instead, it is an opportunity to align technology with organizational goals, optimize operations, and prepare for the future.
By reflecting on past performance, managing recurring subscriptions, tracking infrastructure lifecycles, prioritizing cybersecurity, and following budgeting best practices, organizations can create sustainable, forward-looking budgets that keep them agile and competitive.
As 2026 approaches, technology leaders who plan proactively will be better equipped to support growth, manage risk, and deliver value across the business. The key is not simply to “set the budget” but to treat it as a living framework—one that adapts to changes in technology, business needs, and the broader security landscape.