Like any other business expense, IT spend can greatly impact your return on investment and net income. While large corporations have massive budgets to use for their IT needs, as a small business owner, combing through every expense and trying to find new ways to save money is essential. Use the following tips to help you manage your IT spend more effectively, while staying ahead of the rapid technological changes that occur year after year.

How Big or Small Should My IT Budget Be?

Most small to medium sized businesses allocate approximately 4 to 10 percent of their annual operating budget to information technology needs. This includes the purchase of hardware, software, upgrades and technical support. If you own a newer business that deals with a very small yearly revenue number, the percentage you spend on information technology can be twice as much.

Corporations that have millions of dollars in yearly revenue often base their IT spend on numbers and facts from their competition because an IT structure often dictates how fast a business can grow. If a company is using computers and networking equipment and protocols that are nearly a decade old, productivity levels will be extremely low and the company won’t be able to compete with others in the same market.

Measuring productivity is a good way to determine whether or not your IT budget is big enough. If employees are unhappy with the current systems in place and you’re constantly spending money on solving technical problems, consider increasing your budget to buy new computers.

Making the Most of Your IT Spend

A number of different factors go into managing a strict budget for IT needs. By consolidating your purchases, along with outsourcing some aspects of your tech needs to a third party IT support company can potentially save you a significant amount of money every year.

• Strategic Business Alignment – Like other aspects of your business, align your IT needs with the company’s short term and long-term goals. Doing a quick study to find out where your IT resources are being allocated and how important those aspects are for your company may lead you to discover a great need for the same resources elsewhere.
• Centralizing Purchases – Use a small, selected number of suppliers to fulfill your IT needs.
• Track IT Usage – Make your IT spending more transparent by tracking the biggest factors that affect your budget. From here, you can cut down on where some IT services or products aren’t needed.

To ensure that you’re making the most of your IT spend and your current technologies, schedule a complimentary consultation with the top San Diego IT consulting company, Syndeo Communications. Our IT experts would be more than happy to take a look at your business plan, answer questions, and offer recommendations for the best ways to streamline your technology for maximum return on investment. Call us today at 760-650-3300 – we look forward to hearing form you.