In 2020, How Much Should I Be Spending on IT for My Business?

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So, how long is a piece of string? Not helpful, we know, but the thing is, the cost of IT in your business needs to be in direct relation to what you want to achieve. Working out how much to invest? Try considering these five factors:

5 Factors to Consider When Budgeting for IT

1. What part of IT is essential to your daily operations?

For pretty much all companies these days, technology is required in some shape or form.

However, there are differences between what IT businesses use, and which is the most vital to their operations.

For online companies, their website is probably the most critical function of their business, and for customer service centres, their phones are probably high on the list of important in-house IT systems.

Figuring out your businesses main priorities is a great first step to understanding where your spending on IT needs to be allocated.

2. Is the business in growth mode?

When looking at the strategy you have in place for the year ahead, what kind of growth do you think you will see?

Because if there is a lot planned in terms of scaling up (or down maybe) then it needs to be expected that this will require a larger level of investment into technology.

3. How much change is the business experiencing?

This again requires a look to the next 12 months to consider any significant changes that will take place.

Perhaps you are moving offices, or your service offering requires a new programme for greater functionality – these changes will no doubt need extra resource to ensure there is minimal disruption to your business.

4. What service expectations do you have when it comes to IT suppliers?

Do you need technology suppliers who are available at all hours to provide one-on-one assistance? Or is cost-saving more important than the service offered?

Your level of reliance on them is likely to reflect on how much you pay for their services, so have a think, honestly, about how much help you require.

5. What is the business’s tolerance for risk?

With all technology comes risk – and every business is exposed to different levels of risk that can occur internally, or originate from an external source. And what’s important here is to understand how much risk you are happy to expose your business to.

Of course, no owner wants any level of threat facing their business, but to eliminate issues completely, it will cost more to have the best systems in place. So to go back to point one, here’s where you need to consider how essential IT is to your organisation, and what effect it would have if you lost access to systems for 30 minutes or a day.

So while the above doesn’t give you any kind of figure to base your IT budget around, hopefully it helps you understand what is most important to your business so you can prioritise your spend where it is most required.

—– Keen on further knowledge onsetting IT budgets for businesses? Download: An essential guide to IT for SME business – Risk, Security and Productivity

Download the Essential Guide to IT for SME Businesses
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