IT and business expenditure usually just leads to numerous arguments over budgeting. Whether it’s the IT department struggling with a limited budget or on-site IT staff simply costing too much, businesses have a difficult time striking a balance.
While businesses know they need IT support, having full-time IT staff can seem like a massive money pit. There is a balance between business expenditure and IT services that makes everyone happy.
Average IT Spending
A study from 2005 shows small and medium-sized businesses often spend more on IT than larger enterprises. However, IT budgets weren’t large even then, with the largest percentage averaging at just 6.9% of revenue. A recent report from Gartner shows this trend still exists. On average, enterprises spend less than 3% of annual revenue on IT support and services.
While spending more doesn’t necessarily make a business more successful, businesses have to consider the value they’re getting from their allotted budget.
Reasons Businesses Cut Back
This forms the foundation for the IT and business expenditure debate. Should businesses spend more or just spend more wisely? Most of the time, IT budgets suffer because:
- Cost of full-time staff plus benefits
- Cost of on-site hardware that doesn’t scale easily
- Downtime after IT staff goes home
- Cost of maintaining software installations and updates
Often times, IT departments are understaffed and use older hardware as a way to save money. As a result, the business doesn’t perform as well as it could. When it comes to IT and business expenditure, businesses have to find ways to do more with a small budget without sacrificing the quality of IT support and infrastructure.
Opting For IT Outsourcing
The solution for many businesses is IT outsourcing. While outsourcing doesn’t have to entirely replace full-time staff, it is a more budget-friendly option. As Business.com points out, outsourcing can save businesses as much as 50% over a full-time employee.
Plus, IT support is available when a business needs it instead of having staff just waiting around for something to happen. It’s more cost effective to pay for just what you use. Of course, outsourcing isn’t limited to staff. Outsource data storage and app hosting to cloud services. Once again, you’re able to pay for what you use and this limits on-site IT maintenance costs.
Are you having trouble with IT and business expenditure and can’t seem to find a balance? Send us a message or call us at 88-405-0029 to discuss your options.
Image: Pepi Stojanovski