How much money should I spend on IT?
Considerations include company size, industry, and infrastructure
It’s a question that has plagued business owners for years: “How much should I budget for my IT?”
In today’s hyper-competitive, technology-focused business world, this question is more important than ever.
Today, virtually every company is taking advantage of technology in one way or another, and you don’t want to be left behind. But at the same time, you don’t want to over-invest in the wrong technology, and end up spending too much on your IT budget for things you don’t need.
So, what should you do?
How do you develop a comprehensive strategic technology and IT budget plan and ensure you spend the right amount? Below are three factors to consider:
1. The size of your company
This is a critical factor to consider. For example:
- If you’re a small- to medium-sized business, you may save money by choosing an all-inclusive support and IT-managed service instead of hiring your own IT staff. An all-inclusive support and IT-managed service may include help-desk support, a virtual CIO, backup and disaster recovery, and proactive vendor management.
- If you’re a large company, hiring your own IT staff may be more beneficial.
Generally, smaller companies will spend a higher percentage of their revenue on IT compared to larger companies, since some IT costs, like network contracts, are fixed no matter how large or small your business may be.
2. Your industry
Your best-practices and data-protection requirements may vary owing to the industry in which you operate. For example, a 2008 survey from CIO asked IT leaders from various industries about their IT budgets. The survey confirms that bank and financial service companies spend about 10.5 per cent revenue on technology-related costs – while manufacturing companies spend as little as 3.4 per cent.
The more important data is to your business, the more you should spend on managing your IT. If you run a small retail business, your IT costs will probably remain relatively low, but if you’re in a data-driven business, like financial services, you’ll probably need to spend more.
3. Your existing IT infrastructure
The state of your existing IT infrastructure is important when it comes to long-term planning. You must assess your IT infrastructure for such things as security vulnerabilities and outdated equipment, which may cause downtime or poor responsiveness.
By understanding the state of your existing infrastructure, you can make smarter investments, including moving data backups to the Cloud, patching holes in your IT security, and preventing data loss from malware and ransomware (such as Cryptolocker).
How 365 Technologies can help you plan an IT budget
We’ll help you review your existing technology, processes, and infrastructure and create a plan and budget for your future IT expenditures, so you can focus on running your business.
For a free consultation, email Michael Anderson or call 204-488-3655.
Learn more about our all-inclusive flat-rate Worry-Free IT™ solution here: 365Care+ Solution