24 Jan Business Budgeting for I.T. Support
Budgeting is an essential factor in running any business. Allocating where your money goes allows you to make forecasts so you can stay on track. A 12-month budget can be updated monthly with actual expenditures and revenues to keep you on target. If you are missing the mark set out in your budget, then you know you must either reduce expenses, increase sales, or lower your profit expectations.
Budgeting I.T. Support is Essential for All Businesses Today
Today businesses need to be aware that there is a high possibility that there will be a hacking attempt if they are not careful with I.T. security. Hackers steal priceless data, exposing many well-known businesses to dire repercussions, including the loss of reputation and goodwill, not to mention potential lawsuits. Safeguarding one’s data with the best technological tools available today is crucial. Even small companies must allocate a set budget for I.T. support and security changes fast, and business applications upgrade their programs constantly. A business that is lax in modernizing risks a scenario where there starts to be a cost in employee productivity and where the overhaul must happen at once, creating a significant unbudgeted expense.
But How Much Should a Small Business Budget for I.T.?
According to Deloitte insights, banking and securities companies spent the most on Information Technology, with an average of 7.16% of revenue between 2016 and 2017, while construction companies spent the least, with an average of 1.51% during the same time period. The average for all industries was of 3.28%. The same study revealed that CIOs in health care services, insurance and travel, media, and hospitality reported that their I.T. budgets were increasing to keep up with the new digital capabilities available in today’s market. The study also found that of high-performing companies, 57% increased their I.T. budgets from 2016 to 2017.
Gartner Group, a global research and advisory firm, has set the Cross-Industry Standard in North America in I.T. spending in 2016 at 3.5% of revenue. This includes budget allocations for hardware, software, personnel or outsourced services, and disaster recovery.
A CIO Magazine survey in 2013 found that the average I.T. spending as a percentage of revenue was 5.2%. The 2012 average was 4.7%, so there was a slight increase reported. Overall, CIO Magazine recommended that businesses spend a range of 4-6% of their revenue on I.T. CIO Magazine found that the average small company spends 6.9% of their revenue on I.T. The average mid-sized company spends 4.1%. While the average larger company spends 3.2%.
These numbers only constitute a benchmark of course. Your own situation, including size, industry, goals, and how much you have invested in I.T. in the past should also count in determining your budget. In Utah, SOS Support offers a free consultation to discuss your particular business needs. Contact us today!