A very common question among businesses is, “How much should I be spending on digital services?” or “Should we increase our IT budget this year?” It’s a good question, so we’re going to take a look at the latest IT budget trends to see just what companies are deciding.
Let’s talk percentages: It’s natural for IT budgets to increase at least a little every year to keep up with the inflation of costs and so on. Recently, these increases have been diverging between 1)businesses that care a lot about digital performance and new services and 2)companies that really don’t want to spend much on IT right now. Companies that want to grow their digital services are increasing IT budgets by around 4.6%. That can be compared to an average increase of around 2.2%.
Hold on, though! These budget increases aren’t so simple as all that. Thus far in 2017, IT budget decisions have been very…noncommittal. A study on UK buyers of IT services has shown hardly any different between 2016 and 2017 budgets, both hovering around an average of $294,000. That’s a serious problem, because IT tends to be an area where investment is required for new growth and continued efficiency. When companies don’t increase their budgets or make increases so small that it doesn’t really matter, they are essentially committing to a year of non-growth. That’s a little troubling for basic IT services, but much worse if a business needs to upgrade their security systems but doesn’t have any many to do see – especially since we’re seeing a rising in cyberattacks that target unprepared businesses just like these.
So why the hesitation to spend more money on IT? Most cited uncertainty with the global political situation. New tensions, uncertain alliances, and potential conflicts make everyone nervous, and when organizations get nervous they pull back on spending, particularly spending on new services that they aren’t sure if they want to adopt or not.
Bottom line: If you have the income, consider spending more than the average to make sure your IT systems stay in a healthy place.
But let’s take a look at what companies really are spending money on within their IT budgets these days. First up is cloud and hosted services, the number one target for these budgets. That makes sense – cloud/hosted services are a great way to save money by staying away from expensive hardware, and there’s a service or tool out there for pretty much any business need, so companies can always find a solution with a little searching. Company leaders can also understand the, “Like what we do now but cheaper and better” benefits of cloud services – although security remains a concern in this situation.
However, companies that really want to go all out on tech spending are increasing portions of the budget for much less traditional investment. AI systems are getting much more popular, thanks to their increased use in marketing, customer management, and security (where they look for common signs of suspect data or actions). Virtual reality is another spot where spending is going up as marketers investigate how VR can help spread their brand – although a common alternative is 4K drone video, another area getting a lot of interest. Some companies are even experimenting with 3D printing!
A whole lot. Take a look at the healthcare provider industry, for example. The annual spending budget in 2017 here was around $30 million, without an expected $2 million increase in 2018 – for companies with around 5,000 employees. And that’s not really that much when looking at it from a broad perspective, because…
If you really want a digital transformation project, your IT budget will simple not cover it. When the big companies want a transformation, brands like GE and the Dollar Shave Club are setting aside around $1 billion. While you obviously have to scale that down for smaller companies, it’s still a couple times larger than a traditional annual IT budget. Broad transformations cost money!
It’s important to remember that every IT budget will be different, and how much you should spend on digital services depends on your own goals.
Forty-three percent of attacks are aimed at SMBs, but only 14% are prepared to defend themselves (Accenture).
The cost of cybercrime is predicted to hit $10.5 trillion by 2025, according to the latest version of the Cisco/Cybersecurity Ventures “2022 Cybersecurity Almanac.”.
The average cost of a data breach in the United States is $8.64 million, which is the highest in the world, while the most expensive sector for data breach costs is the healthcare industry, with an average of $7.13 million (IBM).
40% of businesses will incorporate the anywhere operations model to accommodate the physical and digital experiences of both customers and employees (Techvera).
More than 33 billion records will be stolen by cybercriminals by 2023, an increase of 175% from 2018.
The internal team was energized. With the Level 1 work off its plate, the team turned its attention to the work that fueled company growth and gave them job satisfaction.
The three sectors with the biggest spending on cybersecurity are banking, manufacturing, and the central/federal government, accounting for 30% of overall spending (IDC).
It takes an average of 287 days for security teams to identify and contain a data breach, according to the “Cost of a Data Breach 2021” report released by IBM and Ponemon Institute.
We did a proof of concept that met every requirement that our customer might have. In fact, we saw a substantial improvement.
We did everything that we needed to do, financially speaking. We got our invoices out to customers, we deposited checks, all the things we needed to do to keep our business running, and our customers had no idea about the tragedy. It didn’t impact them at all.
“We believe our success is due to the strength of our team, the breadth of our services, our flexibility in responding to clients, and our focus on strategic support.”