Desktops, laptops, tablets, phones, POS systems, cloud storage, data backup and servers – today these items are all integral parts of business. Technology gives us the opportunity to do more, to be more productive, and to better help customers. Strategic IT provides efficiencies that help businesses grow. And as technology becomes more indispensable for doing business, the question many companies ask is, “How much should we be paying for IT?”
What is the optimal amount to allocate in the budget for IT?
Company size has a big impact when determining the budget – but larger may not mean more expensive. Small to medium sized businesses surprisingly spend more (as a percentage of revenue) than larger companies when it comes to IT.
- Small companies (less than $50M in revenue) on average spend 6.9% of revenue on IT
- Mid-sized companies ($50M – $2B) on average spend 4.1% of their revenue on IT
- Larger companies (over $2B) on average spend a mere 3.2% of their revenue on IT
Why should I invest in IT?
Many business owners make the mistake of growing their companies without considering the changing needs of the company. IT is one aspect that often gets overlooked when it comes to allocating budget.
Your IT budget is more than funds for when technology goes wrong. It’s an investment plan in your growth. These are a few reasons your IT budget is crucial for your business:
- To reach more customers and develop a better business relationship with your base.
- To provide better and more unique service to your customers.
- To streamline operations, reduce costs, improve efficiency, maximize profit, minimize waste, and devote talent to core business instead of overhead.
- To eliminate downtime for your business.
- To establish your business as the most progressive and forward-thinking.
It’s important to note that the companies that invest the most in IT aren’t always at the top, but those that are consistent and thoughtful about technology investment find the most success.
Customer expectations are rising and competition is getting fiercer. Whether it’s the fundamentals for your business or an edge over your competitors, it’s important to find an IT expert that can help you determine where spend your IT dollars to keep your business growing today and farther into the future.