Technology moves fast, evolving so quickly that what was cutting-edge a year or two ago can feel obsolete today. For associations, this presents challenges when trying to budget for technology. A good solution is to take a holistic approach that separates capital and operating expenses, while leaving wiggle room if unexpected needs arise.
The first principle that will help associations do a better job of budgeting, even as times change, is to know what you have, says Christopher Finnegan, senior director of technology solutions at Association Headquarters.
“I think one of the biggest things to do upfront is just ensuring what IT is in your organization,” he said. “I know that sounds funny, but sometimes, especially with these SAAS [software as a service] products and a lot of work going online, it is really important to understand what you have.”
Capital vs. Operating Expenses
Once you have a clear picture of the technology you’re currently using, you can start with some key budgeting principles. Finnegan suggests separating capital and operating expenses.
“With operating expenditures, you can move pretty quick,” Finnegan said. “You are getting those services from other places. There are lower upfront costs. Capital expenditures are the bigger ones—you have to buy maybe these big servers, these large pieces of equipment, these large systems that depreciate over time.”
Distinguishing these two expense categories will give you room to figure out your association’s immediate budget needs and those that will come over time. And because almost every operational area in an association uses technology, it’s also important to think through how the budget for tech is distributed throughout the organization.
“Does this fall into our overall technology, or is it a piece of software for marketing?” Finnegan said. This helps determine where the expense should be allocated in your budget.
When it comes to big expenses, such as buying laptops for all staff, Monica Dillingham, chief technology officer at the National Association of College and University Business Officers (NACUBO), said organizations can sometimes spread out their costs to avoid taking a big hit at once.
“For equipment, we used to refresh everyone in one fiscal year,” Dillingham said. “Now we have a rolling roll out, so that I can spread it over three years.”