How Much Should Your Company Spend on IT?

As a business owner or decision-maker, you likely have a hand in deciding how and where to allocate funds. And with 2020 in full swing, you might find yourself asking “how much should we be spending on IT?” As technology continues to play a bigger and bigger role in our lives (and our businesses!) with each passing year, this question becomes more important. After all, the possibilities are endless with advancements in technology, equipment and more. We’re here to help! Read on for some information regarding IT budgeting.

Investment in IT is just that . . . an investment

It can be hard to justify spending a large amount on something that doesn’t yield an immediate return. However, investing in IT is a crucial part to running a business and can have significant long-term benefits.

Appropriately investing in IT:

• Allows you to remain relevant and competitive in your industry
• Safeguards your business against attacks and breaches
• Can help you to provide better and more personalized service to your customers
• Will give you the tools you need to grow your business

You will likely find that when you spend the appropriate amount on IT, you’ll save in other areas of your business due to increased efficiencies.

Failing to invest in IT

What happens if you don’t invest the appropriate amount in your company’s IT? Sure, you may be able to skate by for a year or two and may even save some money. However, you’ll likely end up using all of that savings (and more) when your security is breached or your systems can’t keep up with demand. Instead, take a proactive approach. Evaluate your budget and your needs each and every year, investing where necessary for long-term success.

Nailing down the right amount

Many companies make the mistake of recycling their budget year over year. Not only do your needs change each year, so does the industry. In 2020, On average, it is recommended that companies allocate 14-18% of their revenue to IT and cybersecurity. Of course, that number is just a guideline. The bigger your company or the more unique your needs, the higher that percentage might be.

Using your investment wisely

Just as important (if not MORE important) as how much you spend on IT is how you utilize it. Partnering with a trusted technology partner will ensure you are spending the right amount on the right things in order to meet your business objectives.

It’s time to get serious about your IT investment. Not sure where to start? We can help. Give Warwick a call to discuss your options.