IT Budget

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What is a Typical IT Budget for a Small or Midsize Business?

Small and medium sized businesses (SMB’s) can struggle to put a figure on their IT budget. There are a lot of factors involved in developing a solution that works, not least the industry or sector, the amount of data and how it is currently controlled, as well as the various types of technology being used.

Most SMB’s have to weigh the benefits of including new technology, the potential risks to their growth if the right measures are not implemented and even their position in the marketplace.

If you are an e-commerce business, your IT requirements are going to be different from an insurance company. A business with 3 or 4 staff will have considerably less IT costs than one with a 50 or 60 or more.

How Much Should You Spend?

A lot is going to depend on the context of your IT supply and what you want from it. The first thing to say is that you should treat IT as an investment not simply the need to have set of tools to keep you safe or enable communication.

Effective IT can have numerous benefits, including:

  • Helping to streamline your business operation, including in some cases automating tasks. Boosting your agility means you are able to respond to challenges in your sector as well as give yourself the best chance of growing.
  • The latest cloud packages allow staff to operate remotely. That means you have more flexibility in your workforce. This in turn means you can encourage greater productivity as well as strengthen your networks.
  • Improved cybersecurity will ensure that you keep data and other important information safe. It will also benefit your reputation with consumers.

For a business that has no internal IT department but has about 40 employees who all rely on IT, you will be looking at an average monthly spend of £2,000-£3,000. This can actually purchase you a good deal of tech support in today’s competitive IT environment.

On the whole across all sectors, the average SMB will spend about 6-7% of its revenue on IT. There are some important areas where you should be concentrating your IT budget:

1. Replacing Old Software

Many businesses stick with the same old software way past the time it has outlived its usefulness. This is generally a false economy especially when it comes to collaborative packages that allow your staff to work more productively. Picking the right time to switch to an upgraded version of a software package or try something new entirely is a huge challenge for SMB’s.

2. Old Hardware and Old Operating Systems

Another decision that can have an impact on your business is the age of the hardware systems that you have in place. Old desktops that no longer update can present a risk not only to that particular machine but your entire network. Vulnerabilities in older operating systems such as Windows 7, which will have support terminated in 2020, can present immediate danger to your business if the hardware is not updated.

3. Cloud Computing

The cloud seems all the rage nowadays and for good reason. Cloud services have changed the way many SMB’s do business. They facilitate more efficient collaboration and access to data which can greatly improve productivity. If your business uses remote employees who work from home or you have sales staff that need access to information on the road, cloud computing is indispensable.

4. Outsourced IT Support

With the advent of cloud services, we’ve seen a substantial rise in remote IT support solutions that are specifically designed for SMB’s. Not only has this allowed the typical IT budget to come down, it’s given many businesses a more level playing field on which to compete.

The good news is that outsourced IT support is a lot cheaper than employing staff on site and can deliver a wide range of expertise. It can also be tailored to your needs at any particular moment, scalable whether you want to grow or if you need to shrink your business model and your IT.

Tips for Controlling Your IT Budget

Compared to larger corporations, SMB’s have to do a lot of work to keep their IT support costs under control while still delivering on their needs. It’s important to make sure that you have the right components in place.

  • Have a regular audit to highlight where your IT can be improved or even rolled back.
  • Be prepared to embrace new tech if it can help reduce your running costs in the long term.
  • Think of IT as an investment not a drain on resources.

At Cyan Solutions, we work with SMB’s across all sectors and industries. If you want to make better use of your IT budget in the future and really deliver transformational results, contact our team today.

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