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.

Does Outsourcing Mean IT Cost Reduction

Any business worth its salt will have a close eye on reducing costs at all times. One area that presents a particular challenge here is IT. Keeping data and infrastructure safe is important but so is having the appropriate software and services in place to help your business work productively and safely.

But is outsourcing the answer to all your worries and does it deliver an IT cost reduction?

At Cyan Solutions, we take a closer look.

What is IT Outsourcing?

Back in the old days, any business setting up would need to get an IT infrastructure in place, usually on site. Large corporations spent millions developing IT support services that could handle everything from computer setup to internal server issues.

Gradually, over the last ten years, third party suppliers of IT services have become increasingly popular. These have developed mainly as a result of our improved connectivity. It means you can set up a remote IT service element which operates separately from your business but delivers all the expertise and technical support that you need on a day to day basis.

The Benefits of IT Outsourcing

There are numerous advantages of using a third-party IT support service. The first is that you get the expertise you need on demand. If you were employing an in-house IT team it could cost you thousands of pounds a year just for one person. Not only that, you might not get the full expertise that your business really needs.

Outsourced IT companies provide services to many different clients which means they are able to take on a wide range of experts to help solve particular problems.

If you have a small to medium size business and are looking to grow, developing a plan for your IT to meet your needs can be a huge challenge. Outsourcing enables you to scale up and down as and when you need it. As long as you find a flexible and responsive partner, you can quickly alter your service and tailor it closely to your requirements.

The truth is that we live in a fast-paced world when it comes to technology. It was only about 15 years ago when most people connected to the internet via a clumsy dial-up connection and just over 10 years since the first smartphone hit the shops and broadband started to become such an indispensable thing in our lives.

When you think about how much has changed, and how much we take our connectivity for granted, you begin to see the developments that could come in the next few years. It’s important to keep up and ensure your business has the IT support it needs. This can often only be delivered through effective outsourcing nowadays.

IT Cost Reduction: What It Means for Your Business

Businesses require much more IT support than someone with a simple home broadband connection. Speed, for example, may well be a priority for your business. Your cybersecurity needs are going to be of a higher level and your access to software will essentially determine how productive you are able to be.

IT cost reductions and savings come from a number of areas when using outsourcing:

  • You can tailor your IT provision to suit your needs, depending on the budget you have.
  • You can use money saved in employing in-house IT experts to further develop your business.
  • You can scale your IT support to suit your needs, improving it as your customer base and business grows.
  • You get to rent the top talent you need only when you need it. If there’s a specific problem with your IT infrastructure or a challenge ahead, you hire the expertise you require for a specific time at a fraction of the cost.
  • Outsourcing your IT service will also lead to cost reductions because your business is better protected. Your IT support will ensure you remain on top of the latest threats, reducing the risk of your systems being compromised. That in turn should boost your reputation as a safe company to deal with.
  • An outsourced IT service can also help you improve productivity by making sure you have the appropriate software in place for your business needs.

Finding the Right IT Partner

Of course, the big challenge here is finding the IT support service that not only delivers on your current business needs but helps you plan for the future. At Cyan Solutions, we have the experts onboard who can make a real difference to your growth and future security.

Whether it’s cybersecurity, IT support, a virtual CIO or cloud services, we ensure your business stays connected, safe and productive at a cost you can afford. Contact our expert team today to find out how we can help transform your business.

Is Your IT Spending Under Control?

There’s no doubt that IT spending is one of the most important outgoings that any business has to control. Many companies, however, don’t have a full handle on their budget in this area. Neither do they understand if what they have is suitable for their business in the first place.

Some business spend too much, others have set their budget way to low. Finding the happy medium that delivers everything you need is a challenge but certainly worth the effort.

Deciding Your Budget

There are a number of different factors that will affect the percentage of your budget that you spend on IT. These include:

  • The sector you operate in. Banks tend to devote 7.16% on IT, according to Deloitte. The building sector can be as low as 1.5 % and the average is around 3.3%.
  • The cybersecurity environment can have an impact on spending. In recent years, following a number of high-profile breaches, many high-risk companies have upped their IT budget by as much as 50%.
  • The size of your business and the budget available is, of course, going to determine quite a bit.
  • The truth is, however, that many companies are underspending on their IT and potentially missing the opportunities that the latest developments have to offer.

IT covers a much wider range of assets than many businesses realise. It’s more than just cybersecurity and operating platforms. Your IT spending also includes the hosting package you have for your website, your phones, the cloud services you use, as well as the software packages that help you deliver your business goals, including your CRM and packages such as Office 365.

If you’re a small business, your IT spending can be spread over a bunch of different areas which makes it difficult to keep track of.

How to Control Your IT Spending

The first thing you need to do is carry out an audit and list everything that you use and how much it costs you. Many SMBs don’t have a clearly defined budget for everything under the IT umbrella and it can be quite eye-opening once they discover what they spend.

1. Look at IT as an Investment

Do you think IT is a necessary evil? Then think again.

The mistake that many companies make is not understanding that IT forms the central spine around which the rest of their business operates. Changing how you view IT is important because it can open up new areas of investigation and ensure you make more productive choices when it comes to the services you employ.

For instance, cybersecurity is an investment not only in your own business but your customers as well. The last thing you want is for their data to be stolen and your reputation damaged. Better collaboration tools that your staff are able to access are also an investment because they improve their productivity which in turn boosts your bottom line.

Stop thinking ‘what do I need’ and start exploring the possibilities that IT solutions can deliver.

2. Create an IT Budget

You may be surprised at the number of businesses that don’t have a separate IT budget. Unless you do, you won’t be able to control your IT spending even in a very basic sense. A clearly defined budget helps you keep track of spending and gives you the chance to decide if you want to put more in particular areas of your operation.

3. Focus More on Productivity

The key to successful IT budgeting is to look at it from a productivity viewpoint. There are many software solutions and cloud-based services that may improve the performance of your business and these are developing all the time. For example, the growth of AI help and support services in recent times could take pressure off your staff and increase customer loyalty because the most popular queries are being answered with little or no time delay.

4. Be Strategic

Finally, it’s no use increasing or lowering your budget unless you are doing it for a reason. It may be pertinent to your business to cut costs but IT is generally not the best area to do this. You always need a good plan and it pays to discuss your options with an IT service provider that understands your needs.

At Cyan Solutions, we can help you better develop your IT spending and keep it under control while really delivering for your business. We provide IT support, cybersecurity solutions, virtual CIO and cloud based services that can really help transform productivity at a price you can afford. Contact our expert team today to find out more.

IT Budget Planning Mistakes You Should Avoid

There’s no telling when rising costs can start to get the better of your business. That’s why it’s vital to make sure you budget properly. That goes whether you are a small business with just a few employees or a large corporation with thousands.

If you’re a company that wants to stay ahead of its competitors, one thing you will certainly need to focus on is your IT budget planning. It’s pivotal to ensure you are able to deliver great services to your customers and provide the tools that your staff need to promote your business and drive it forward.

It’s not all plain sailing, however. There are plenty of pitfalls that can siphon off elements of your budget, leaving less for more important areas of your business. To help out, the team at Cyan Solutions have put together a list of the top budgeting mistakes you will want to avoid.

1. Not Fully Understanding Your Needs

Whether you are planning a digital transformation, want to up your cybersecurity posture or simply want to migrate your business operation to the cloud, understanding what each move entails and why you are doing it is important.

Many of the businesses we come across, treat their IT as a piecemeal thing rather than a series of interconnected dots that create a whole. Before you go about IT budget planning, your first step is to list the components of your current provision and decide what purpose each serves. Then you can begin to look at what you want to add to make your business more secure, more productive or more efficient.

Aligning your IT needs with your business needs is imperative. Making sure that your tech spend is heading in the right direction to support growth and revenue is not always an easy thing to do, however.

2. Budgeting and Timeline

This is a common issue with many businesses operating on a fairly restricted budget. It can mean you end up budgeting from month to month rather than looking at 1 year, 2 year or even a 5-year projection. That also means you are unlikely to have an IT budget in place that can help service you if you intend to grow. Try to see as far ahead as possible and understand what your costs are and how you are going to meet them.

3. Not Being Ready for Changes

It’s all well and good spending money on new technology but a huge mistake businesses make is not ensuring they are good to go when it is finally in place. An example of this would be if you were planning to migrate your operational procedures and other IT to the cloud so that it can be accessed securely from anywhere. If you haven’t trained your staff for using this new approach and you haven’t considered other issues such as your online security, you could be wasting money and not delivering a decent ROI from the outset.

Moving to the cloud has more benefits than simply cost savings and businesses need to be aware of this while deciding what their priorities are. If you are a company that has busier periods during the year (for example, Christmas), being able to up your capacity at this time can be of huge benefit and that’s something moving to the cloud can facilitate.

4. Choosing the Wrong Software License Plan

Software-as-a-Service, or SaaS, subscription licensing (eg SalesForce, Microsoft Office 365, Google Apps) has now become the norm for most companies. What businesses often fail to do, however, is understand their actual license needs, which often means they over commit and, inevitably, overspend. A team of sales people, for example, will have very different needs to teams working in operations or finance. Some users may just need access to online tools, others will need the full suite of features. Identifying which license plan suits each role in your business could save you significant costs in the long term.

5. Tech and Value

It can be tempting to get the latest bit of tech, just because everyone else is doing it or because you’ve seen an ad somewhere. Business owners looking to improve their efficiency or add value to their customers, bring in new technological solutions without truly understanding whether they are adding value or not.

On the other side of this is making sure that the software and IT services you are currently using are actually still providing value for money. For businesses, especially smaller ones, this can be a difficult balancing act to get right, especially if they have new technology that impacts on the performance of older software.

In a rapidly changing world where new tech is appearing almost daily, it is difficult for businesses to keep up. While sticking with tried and tested solutions can seem financially sensible, there always comes a point where that more advanced technology has to be given some breathing room.

At Cyan Solutions, we provide a range of IT support and services for businesses across the UK. If you’d like to find out how we can help support your next round of IT budget planning, contact the team at Cyan today.

Our Guide To IT Budgeting

Budgeting for your business is never easy. One of the hardest aspects to budget for is your IT strategy and requirements. Whether you base it on projects, annually or quarterly, it can seem impossible to know how to budget when you must manage costs and prepare for unexpected situations.

However, when IT budgeting is crafted correctly, it can serve as a useful and influential roadmap for the future of the business and the strategy you are taking. Your budget can not only be the plan of finances but can be how you communicate where you want your technology strategy to be and how it can help the organisation as a whole.

A good IT budget will not only help you to prepare for the costs of the project or year but will also help you to set your priorities, so you know what to aim for and what is vital for your business. Not only does the budget help the IT department, but it also helps line managers in other departments. They can see and input the activities that lie ahead and help your IT plans to be supported across the company.

So, how do you start to prepare your IT budget?

How to prepare your IT budget

Firstly, the organisation needs to decide how best to allocate the IT budget. Some organisations want to assign an IT budget to each department and use a chargeback system. For some businesses, this can work, for others, it can be too complicated and challenging to instigate and work effectively. Either way, the IT department itself will need its own budget for day-to-day maintenance.

It is essential to begin your budget so that it provides a level of detail that builds a substantial case for approval but also doesn’t require micro-management. It needs to be flexible but still be a driving force behind your technology plan.

Secondly, you need to include the vital aspects of your IT budget.

Eight essentials to include in your IT budget

1. Upgrades

It is likely that you will need to upgrade outdated software and hardware and it is best to be prepared for the cost of this.

2. Staffing

While some IT staff costs may be covered through the HR budget, you may need to incorporate staff into your IT budget whether you are expanding the team, promoting, increasing training or purchasing new equipment for the team to use.

3. Software

Software can sometimes seem like an unnecessary expense, but software can help to make staff more efficient and productive, which can, therefore, cut costs and boosts profits for the overall organisation. Regarding software budgeting, always run a cost/benefit analysis. Remember, you don’t have to spend your entire budget just because you have allocated a cost.

4. Cloud

The use of cloud technology continues to increase, and your business needs to prepare for it. Whether you expand into more cloud-based solutions, require more storage or need to strengthen your cloud security systems, this will take a chunk of your budget.

5. Mobile technology

Handsets quickly become outdated, and data plans increase rapidly. You need to account for increasing spend whether this is for new employees, upgrades for all staff or incidents when devices are lost, stolen or broken. As well the devices and data, you may need to also account for applications that enhance security such as mobile device management.

6. Training

The IT department has considerable responsibility for maintaining cybersecurity across the whole organisation. As well as strengthening systems internally, the IT department will need to deliver regular training to ensure staff remain complaint with IT policies and do all they can to support cybersecurity for the business.

7. Backup

Your budget will need to account for a backup solution, whether you need data back-up to a variety of locations or upgrading your own backup hardware. Within this you may also need a back-up for internet connection should your chosen solution fail, and you need to get everyone back online quickly.

8. Disaster

Every IT budget should declare a proportion of the budget for disaster planning. There could be many aspects that go wrong, from broken hardware to data compromises or server issues. Whatever aspects that you manage within the IT department make sure to dedicate a proportion to covering any disasters that may occur.

Flexible planning

While it can be stressful to make sure every pound is allocated correctly, it is important to remember that fluctuations will happen, and you need to prepare to be flexible. Always consider your budget as a work in progress and try to tweak it where you need to so that your strategy remains on track.

If you need advice on IT budgeting or are looking to upgrade your technology solutions for cost-saving, security and efficiency, then get in touch with Cyan Solutions to find out how we can help.