What Should Your Business Spend On IT?

Coming out of pandemic restrictions many businesses are assessing how their IT setups performed in the stress test of 2020. Could their infrastructure support working from home and now hybrid work setups? Were security protocols enough for having employees out of the building? Were systems and equipment upgraded while employees were away for so long?

The leading IT question for most small business owners is how much should we be spending on technology?

A general standard is 4-6% of revenue should be spent on technology. Some industries are going to be much higher and there are a few that could cut back a little. But keeping the budget in line with the competition means that your small business doesn’t fall hopelessly behind and face challenging and expensive outages, or ill performance.

How can businesses best allocate their tech budgets to maximize the spend?

Equipment: Computers and printers are the obvious big-ticket items here but the supporting infrastructure (including WiFi, any cloud service), point of sale, and telephones. Cloud computing can reduce costs on servers and other hardware and allow businesses to focus on paying just for what they need.

Security: Over the last year we have seen more than normal uptick in phishing security breaches. Data privacy remains a challenge for most businesses, protecting internal data and the data of your customers, patients and clients is vital.

Software and subscriptions: Every business has specialized software that they need as well as the basics like accounting and point of sale.

Website and Marketing: Most businesses need to have a digital presence on a website and often social media accounts. The costs associated with web infrastructure, development and tools like Google Analytics are important line items to consider in the budget.

All of this can feel overwhelming – business owners want to focus on their business not a server upgrade. If your business is using outsourced IT you might consider using a VCIO. A VCIO can help guide priorities, plan expenses, explore options in the cloud and equipment. ITN’s VCIO services can create a forward facing IT plan that works within your budget but allows technology to work for your business instead of against it.