Technology has transformed the way we conduct business. Companies can streamline processes and reach customers worldwide with the click of a button. While technology has proven to be a major asset to business growth, it does come with a cost. As technology has continued to improve in recent years, businesses spend thousands of dollars monthly to maintain the newest products for business productivity and protection.
Although “new” products are beneficial, they may not be the most cost effective and can quickly eat away at your budget. If your technology is more of a financial burden instead of a means for growth, it’s time to reconsider your current tech budget.
This post will provide you with some helpful tips on how much you should spend on IT and how to reduce your IT costs for maximum efficiency.
How Much to Spend on IT
All businesses are not created equal. This means your business may have different needs in comparison to another in your field. Additionally, your business needs may change, which could require different technology. With these factors in mind, many leaders in IT may try to persuade you to purchase technology that is not useful for your business or requires even more money to maintain.
On the other hand, technology has many clear benefits to your company including streamlining processes, cutting down on hiring costs, and helping you compete with your competitors. However, you want to be smart in how you are financing your technology needs. Techvera provides an average of how much to spend on IT business needs:
“The average cost for a typical IT budget is as follows: Small Companies – Less Than $50 Million (6.9% of revenue), Mid-Sized Companies – Between $50 Million – $2 Billion (4.1% of revenue), Large Companies – Over $2 Billion (4.1% of revenue)” – Dec 27, 2022
Do you find yourself spending more than the average on your technology needs? If so, it may be time to reconsider your current IT budget.
Why Do Companies Overspend on IT?
Many companies spend more than the average on their IT for a variety of reasons:
Consistently purchasing new technology – To keep up with the trends, you’re always searching for the “new” product. While updating your tech is a healthy practice, you may not be utilizing your current tech to its fullest capacity. Two years is a healthy minimum before considering a new purchase.- Holding on to outdated technology – While constantly updating your tech isn’t great for your wallet, neither is holding on to outdated technology. If your clients or employees seem to have increased concerns about your tech, it’s time for an upgrade.
- Failure to investigate current technology investments – Analyzing the benefit of your tech investments is a wise practice. However, when this doesn’t happen you can find yourself purchasing items you don’t need. These quarterly and yearly reports can help you save money overtime.
- Focusing on manual tasks rather than other business needs – Having technology also means that you need someone to take care of it. Putting your attention to the manual tasks or paying multiple tech staff takes away additional time and money that can be directed towards other initiatives.
To help your business save money, it’s important to consider each of these factors before making a new technology purchase.
How to Reduce IT Costs & Budget
Trying to create an IT strategy can be difficult without the right help. One of the biggest ways you can reduce IT costs as a small to mid-sized company is hiring a managed IT service provider that offers all your tech needs. Working with a managed IT provider like ABI can help you streamline your IT budget, drive down fixed costs, and eliminate unnecessary spending.
One surefire way to reduce IT costs is making sure your technology is always working. At ABI, we offer 24/7 365 monitoring to maximize uptime and keep your systems running securely. Additionally, we provide various services from backup disaster and recovery to cloud solutions and even phone and security cameras. With more than 20 years in the Information Technology business, we know the best services to meet your current and future IT needs. Once established, you and your employees will have the opportunity to focus on what matters most: the health and growth of your business.
Contact us today and get a free consultation to begin your journey towards the right IT solutions for your business.
