How a Business Should Budget for IT
February 15, 2022
Areas of Tech to Consider
While IT spending differs among industries, a good rule of thumb is to spend between 4% to 8% of revenue on IT. This covers all technology spending. So if a business is earning $1 million in annual revenue, investing $40,000 to $80,000 would mark a great starting point. Often the biggest IT cost is software licensing. These include creative suites like Adobe, productivity apps like Microsoft 365, administrative tools for bookkeeping and expenses, or custom software specific to your business. The hardware of course covers computers, monitors, laptops, cell phones, TVs, and printers, but it also includes the devices that help the end-user gadgets work – access points, switches, and other network equipment. The latter items can sometimes be overlooked when preparing an IT budget, but they are essential for getting the most out of your technology. Additionally, organizations need to budget for phone and internet service costs, as well as organization-wide costs like cybersecurity and cyber insurance policies. Plus, organizations should plan for strategic new initiatives such as expanding a product line or utilizing automation. Depending on your organization's needs and priorities, only some of the technologies listed above may be needed, but they all should be considered to help increase productivity, efficiency, and ultimately your bottom line.Am I Getting Good Value?
Value is created in the type of relationship your business has with your technology partner. At the most basic level, your tech provider should be strong with the fundamentals: break-fix support and preventative maintenance to keep your organization running smoothly. If the basics aren't being met, you know you don't have a great partner. But even if your Managed Service Provider (MSP) is meeting those requirements, you are most likely missing out on value. To leverage technology to improve your organization's performance, your MSP should be an advisor and guide, and be proactive in planning how your IT will look for years to come. The technology roadmap should be thoughtfully designed and explain where you currently are, where you're going, why you're going to that destination, and how much it will cost. And even beyond that, where FIT Technologies lives, is the MSP becoming a true strategic partner. Where there is an organizational need, FIT is brought in to help facilitate the discussion from a technology perspective. Additionally, FIT can proactively initiate technology conversations. We've seen how technology is making a difference for other businesses, and we love bringing that experience to all of our clients to help them improve their outcomes. To learn more about how FIT can guide your organization's technology for years to come, contact us today.