How Much Should Your Company Invest in Technology?

5 minute read

How Much Should Your Company Invest in Technology?

In today’s competitive business landscape, operating on slim profit margins requires every aspect of your budget to contribute to the success of your enterprise. While it may be tempting to trim IT budgets, such a move can endanger your data security and limit growth potential.

Cutting corners on IT spending without a clear understanding of how much to allocate, or what the industry standards are, can lead to a guessing game that could hurt your company’s future.

Underfunding IT departments can weaken your organization’s capacity for growth down the line. Therefore, understanding how technology impacts ROI and its relevance to your competitiveness, risk aversion, and operational efficiency is crucial in determining your IT budget.

With a carefully planned and effective IT strategy, you can convince your decision-makers of the necessity of your IT budget, while ensuring your business continues to thrive and grow. Take a closer look at how much Texas businesses should be spending on technology to stay competitive.

What Should I Budget for Technology?

The cost of technology for your business is heavily influenced by its specific needs. Variables such as your organization’s size, industry, location, assets, and more play a role in how much money should be allocated toward IT expenses. Nonetheless, studies have unveiled some general benchmarks for IT spending across North American businesses.

According to research by Computer Economics, the average technology expenditure for firms in 2020 was 2.6% of their income. However, this percentage varies significantly by industry. Keep in mind that the study’s respondents were limited to businesses with annual revenues of at least $50 million or IT expenditures of at least $1 million.

In 2020, overall IT spending is set to increase by 3%. Although total spending increased, the proportion of revenue spent on technology remained stable over the years, indicating that firms experienced revenue growth and proportionate IT spending growth.

For small firms, investing in IT is essential to keep up with technological advances. On average, small companies spend 6.9% of their entire revenue on IT.

If you’re spending more than your industry norm, consulting with a professional to review your budget is a wise move. Have you checked if your existing IT configuration meets all of your requirements? Are you receiving improved benefits from your increased IT spending, or is it merely becoming more expensive?

Last year’s top business foci were cloud applications and infrastructure, data analytics/BI, and digital transformation, owing to their ability to increase capabilities while keeping costs low. If you have the budget, investing in these areas will provide the most significant benefits.

If you’re paying more on current technologies, consider moving your services to save on costs. If your company’s IT budget is less than the industry standard, it may be because you scored a bargain or, more likely, left yourself open to security flaws, putting your company at risk. Investing in the correct IT resources can make your company more competitive in the long run.

Ultimately, cutting technology expenses can hinder long-term savings and operational advantages, causing reduced company performance.

Determining Your IT Services Budget: Factors to Consider

When it comes to your IT budget, a portion is dedicated to IT services. However, the amount you should allocate depends on a variety of factors. These include the size of your business, its specific IT requirements, the price of IT assistance in your region, and your overall budget. By carefully considering these factors, you can determine the optimal amount to allocate to IT services and ensure that your company has the IT support it needs to operate smoothly.

What should the price of IT services be?

Top IT experts estimate that managed IT services cost between $100 and $150 per person each month, with cutting-edge technology and consultancy potentially increasing that figure to $250 per person. To meet your company’s needs, you may need to allocate several thousand dollars each month for IT services, depending on your employee count. Additionally, specialized IT services for industry-specific compliance or software maintenance may result in higher expenses. However, the benefits of managed IT services far outweigh the costs, as being underprepared or vulnerable in terms of technology and security can be much more costly.

Return on Your Technology Investment

Investing in technology has numerous benefits, including increased productivity, improved efficiency, and reduced downtime. It’s important to think of your IT budget as an expense rather than an outlay, similar to your power bill. By paying less for the same services, you can impact the quantity and quality of the services you receive. Make the smart choice and invest in technology to see significant gains for your business.

Consider technology as an investment rather than merely an expense

For most companies, labor is a significant operational cost that can make up as much as 70% of the overall budget. But with the strategic implementation of technology, you can optimize labor productivity and minimize expenses, leading to increased profits.

By leveraging technology solutions, businesses can achieve greater efficiency without having to make frequent hiring decisions. This means that expanding businesses can scale operations in a cost-effective manner, ultimately leading to a better bottom line.

The Return on Risk Reduction

According to a study by Gartner, the standard organization can lose a staggering $5,600 for each minute that its network remains inactive. This can translate to losses of close to $300,000 every hour. Furthermore, even when considering the lower expenditures and revenues of small businesses, the losses still add up to an average of $140,000 per hour.
The return on investment for mitigating such risks cannot be overstated, especially when one considers the potential costs associated with network downtime as well as security breaches such as ransomware attacks and other IT setbacks that can negatively impact business.


Looking for a technological edge in today’s competitive market? Mothernode might be your answer. Set yourself apart from competitors and strengthen your position. Learn more by visiting our website today. Enhance Your Market Standing with Mothernode – Visit for Details.






5 minute read

1155 W Wall Street
Suite 102
Grapevine, TX 76051
North America

(800) 928-6055


+44 (20) 77706470


Mothernode is a revolutionary software solution that delivers both user-friendly simplicity and robust business capabilities – a perfect fit for companies of any size. Get the one platform you’ll need to grow and better manage your business. Start your LIVE DEMO today!

Copyright 2023 Mothernode, LLC. All rights reserved.

Copyright 2023 - Mothernode, LLC. All rights reserved