The percentage of spending that goes towards technology varies from one industry to another. For example, a financial entity will usually invest more heavily into IT than a construction business, however with the evolution of technology and increase in cybersecurity threats, it will continue to change. 

How much should we be allocating towards our IT budget?

Desktops, laptops, tablets, phones, point of sale (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 Percentage of Revenue is Spent on IT Budget by Industry?

According to Deloitte Insights Global CIO Survey, the average percentage of revue allocated for IT for all industries is 3.28% with a range of more than 7% in banking and securities to less than 2% in construction and manufacturing.

Image courtesy of Deloitte Insights

Why should I invest in IT?

Every business owner must decide where to allocate funds, and it can be difficult to justify spending a huge amount on IT without seeing immediate returns. But IT is an essential part of nearly all organizations and can offer widespread and lasting benefits.

Technology should be viewed as both a cost of doing business, and an opportunity to do more.

• 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.

Cybersecurity is not IT

We’ve been hearing the term cybersecurity quite a bit over the past few years with all the media coverage of cyber and ransomware attacks. Often times, it is lumped in as another responsibility for IT, but this is not the case.

IT and Cybersecurity should be thought of as two different trades, much like police officers and firefighters. An IT professional’s daily activities focus on building and maintaining IT infrastructure, configuring the necessary applications, and supporting them and their users. A Cybersecurity professional’s daily activities consist of security and compliance for an organization by protecting and recovering networks, devices and programs from any type of cyberattack.

When thinking about your IT budget and how much to allocate towards cybersecurity, remember this:

It’s less expensive to prevent cyber-attacks than it is to repair the damage when they happen.

IT Budget and Growth

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 budgeting.

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.

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 to spend your IT dollars to keep your business growing today and farther into the future.

Teknologize has clients throughout the Pacific Northwest with offices located in the Tri-Cities, Washington 509.396.6640 and Bend, Oregon 541.848.6072