How Much To Budget for IT

rob-bruce

written by rob bruce posted on May 6, 2020

Knowing exactly what your business should spend on IT is no easy feat. Seeing what others in your field are spending and understanding what to budget for and why, can make this task easier.

How Much Does Each Industry Spend on IT

Generally the average small to medium size business spends between 3.28% – 6.4% of its annual revenue on IT expenses. Construction companies come in lowest, at less than 2% while banks come in at the highest, around 7%. Here is a breakdown of the average percentage of revenue spent by industry:

  • Banking 7.16%
  • Manufacturing 5.0%
  • Retail 4.7%
  • Travel, Media & Hospitality 4.39%
  • Professional & Technical Businesses 4.0%
  • Insurance 3.62%
  • Financial Services 3.3%
  • Retail 2.2%
  • Healthcare 2.1%
  • Government & Non Profit 2.0%
  • Construction 1.5%

*Source: Computer Economics 2019. (Read more at https://blog.techvera.com/company-it-spend)

Setting A Budget
4-6% of revenue is a good guideline for how much your company should be spending on IT, but the final number will depend on your company’s individual needs and goals. If you have multiple locations, compliance demands, need additional cyber security or rely heavily on technology your IT spend will be higher.

Computers and networks require constant managing, configuring and maintenance and there are ongoing costs for security, software updates, technical remediation and general IT support. However, by simplifying your IT infrastructure and management processes you can increase efficiency and productivity while significantly reducing costs.

It’s easy to want to always cut costs but a study found that of high-performing companies (those that consistently outperformed the S&P), 57% increased their IT budgets.* If businesses don’t switch from a cost-cutting mindset to a growth mindset, they can be left behind.

“The right technology allows your business to compete and rise above the rest in this digital world“ – Click To Tweet

What Do You Need From Your IT?

Before deciding on a budget, you need to know what you want to achieve from your IT systems. In this sense, every business is unique, and for that reason, many small businesses are looking to managed IT services providers for IT budgeting assistance. All Mountain Technologies focuses on the following for the businesses they partner with:

  • Minimizing downtime
  • Securing and protecting customer data, and confidential business information
  • Scaling storage requirements – determining cloud or paperless storage solutions
  • Streamlining operations, reducing costs, improving efficiency
  • Maximizing profit and minimizing waste.
  • Our mission is for your business to run more effectively, while staying on budget.

Budget For Recurring Expenses

Some IT costs fluctuate, but others are fixed, so always budget for them.

  • License fees, such as subscriptions to Microsoft and other software
  • URL registration and renewal
  • IT service provider fees, such as mission critical IT Support
  • Content management systems
  • Wireless systems, such as cloud-based storage solutions

How We Help Businesses Stay On Budget

All Mountain Technologies is a managed IT service provider, and we are experts at what we do. We advise our partners on exactly what they need, where they can save money and what is critical to their business systems.

  • We track all time technicians spend on your business
  • We offer a monthly flat fee, so it is easy to plan for.
  • We work with you to design solutions that will be beneficial to your business goals
  • Plan IT network for new buildings or new locations
  • We help clients use their budgets most efficiently to get more bang for their buck.

Other ways that we reduce costs and keep businesses on track financially are:

Increase employee productivity -Average employees spend 30 minutes per week trying to fix PC problems or helping a co-worker.* A managed service providers means there is always an expert on-hand to deal with issues as they arise, NOT your employees.

Increase IT efficiency – A poorly managed desktop PC with its associated network costs, such as firewalls, storage, servers, routers, printers and internet connectivity, can cost more than $8,500 annually.* We ensure all equipment and systems are running optimally and efficiently.

Save you Money – We prevent revenue lost due to non-functioning computers, servers, software, internet connectivity, etc. so you can keep doing business with little to no downtime.

Save you Time – As an owner or manager, you have limited bandwidth that is already being used to run your business, you should not be wasting your valuable time troubleshooting IT problems.

Ensure the Right Equipment for the Job – Technology options abound and they are being constantly updated. As experts in the field, we can guarantee that you always have the right computers, software, networks and systems for your business goals.

We know it’s not always easy, but it’s important to budget for your technology needs. The right technology allows your business to compete and rise above the rest in this digital world. Partner with All Mountain Technologies and ensure you have the right technology for the right price for your success

*Sources include Deloitte, AMR Research and Gartner, Inc.

Are you ready for YOUR technology to finally work for you? Contact the IT specialists at All Mountain Technologies today to make your business more efficient, organized and successful.