Certain business costs are unavoidable.
Investing in the technology your business needs to operate in safe and streamlined capacity is unavoidable. The future of your business depends on a solid infrastructure, including the right technology solutions. So, how much do you need to budget for technology, and how do you get the most out of your investment?
“Every company is a technology company”. This statement by Accenture Chief Technology Officer, Paul Daugherty sums up how important IT has become for successful businesses. Additionally, even if your business model is hands-on, you still rely on technology to communicate with your customers, track orders, and send invoices.
The exact answer will differ from business to business. Statistics show that small businesses spend nearly 7% of their revenue on technology. The number drops to just over 4% for medium-sized businesses and barely exceeds 3% for large businesses. The savings are the result of scaling.
To see whether your current spending is in line with overall industry trends, take a look at the cost of your current IT support. However, before making big changes it is important to have a clear picture of where your money is going and whether there is room for improvement. Optimization of a business technology budget is an on-going process.
As a small or medium-sized business (SMB) you need to choose between establishing an in-house IT team or using managed IT services. Managed IT services means contracting an external company, like Bridgehead IT, to support your businesses technology needs.
Some larger companies can afford to have a dedicated in-house team. However, combining different types of skills and staying up-to-date with the changing technological landscape can be challenging. Most often, SMBs benefit more from outsourcing and using managed IT.
In 2020, the market for managed IT services worldwide exceeded a value of $150 billion. North America remained the biggest market, but the Asia Pacific region is growing at the fastest rate. By 2026, the market is expected to break the $270 billion market almost doubling its value within five years.
For most businesses, finance and accounting, cloud computing, data security, and digital marketing are among the top IT services they outsource.
Looking at the in-house option, you may potentially need to hire at least four new people. For small and medium businesses, this is a substantial increase in staff. External services may work much better for your budget.
INVESTING IN TECHNOLOGY FOR YOUR BUSINESS
Budgeting for technology is essential for any 21st-century business. Understanding what exactly your company needs is a prerequisite for finding the best solution.
BY THE NUMBERS
Statistics show that small businesses spend nearly 7% of their revenue on technology. The number drops to just over 4% for medium-sized businesses and barely exceeds 3% for large businesses.