Published on September 2
One of the most common requests consultants get from small businesses is about reducing IT costs. While in some cases that’s necessary and beneficial, IT experts will often use the term “optimizing spending" when discussing IT budgets because it’s a bit more reflective of the underlying questions that most businesses have when they’re reaching out for help. “How do I know if I’m spending the right amount of money on IT for my size business?” and “How do I know if I’m spending money on the right tools and IT infrastructure?” Optimizing spending generally means reducing or removing unnecessary or redundant IT tools while re-allocating those saved dollars in proactive ways to save your small business from future IT Emergency or hidden costs. While there’s no exact formula that IT professionals use, there are a handful of ways IT consultants determine how much and on what services a specific business will get the most ROI from. For larger companies of 500 – 2,000 employees, “how much” can usually be determined by finding the typical IT budget across a specific industry. Hospitality, for instance, typically spends 2-3% of their annual revenue on IT, where as software or tech companies can spend as much as 16-19% of their revenue reinvested into IT. For smaller companies, “how much” varies widely, and the IT solutions that small business invests in depends heavily on a business’s industry, 1-5 year business goals, and immediate challenges.2 users found this helpful