Average IT Budget by Company Size
The IT budget average is continuing its growth in 2020, with over 44% of companies planning to increase their IT budget – this is a 6% increase when compared to 2019, according to Spiceworks’ State of IT report for 2020.
The Computer Economics IT Spending and Staffing Benchmarks 2019/2020 report showcases that the majority of IT organisations are taking active steps to move to the cloud, so they are increasing spending too. The ultimate goal is to take advantage of the benefits of cloud software and increase revenue this way.
Gartner’s 2020 worldwide IT spending forecast details that $3.74 trillion will be spent on IT in 2019, while in 2020 that number will go up to $3.88 trillion.
How much do companies spend on their IT budgets?
The percentage of spending that goes towards technology varies heavily from one industry to another. For example, a security firm will usually invest more heavily into IT than a construction business, although with the rise of the digital era and IT threats, that’s likely to change.
The Spiceworks Report shows us that 44% – 63% of companies across all sizes expect budgets to increase, 21% – 31% expect no change and only 4-9% are actually decreasing their budgets in 2020 (the rest weren’t sure yet.).
When looking at an IT budget breakdown depending on company size, Ailean Inc. did a study on U.S based companies that found small and medium-sized businesses spending around 6.9% of revenue, midsize companies spend around 4.1%, while larger companies spend around 3.2% of revenue on IT
It’s likely that because larger companies can benefit from economies of scale when it comes to licensing, packaging, and direct hardware discounts from re-sellers they are able to spend a lower percentage of revenue, even though their actual budgets will be a lot higher.
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How much Are IT Budgets Increasing?
This is backed by Computer Economics who surveyed businesses on how much they plan to spend on average across their three sizes and found that the IT budget by company size will see an increase for all three.
- Small organisations with IT operational budgets that are smaller than $5 million.
- Mid-size organisations with IT operational budgets between $5 million and $20 million.
- Large enterprises with IT operational budgets that are at least $20 million or above.
What they found out is:
Small organisations will be taking the lead this year with their IT operational budgets seeing an average increase of 3.5% across industries.
Large enterprises follow suit with 3.2% increase, while mid-sized companies seem to experience the lowest increase with 3.0%.
Across all sizes, the IT budget average increase will be 3.2% for 2020.
IT is getting more efficient with an average spend per user being lower when compared to the previous year. In 2019, for example, the average IT spend per user was $7,569, a decrease of 7.5% overall.
New technology and software solutions that rely on cloud computing, automation, AI, and virtualisation make it possible to do more with less, and while the spend per user is lower, the employment trends are positive, with multiple new members being employed in each IT team.
These findings arm you with with some solid proof on the current trends when it comes to IT spending. Still, you need to build a solid case for a budget increase and explain to those in charge why the proposed budget is important. The average IT budget by company size – how much they spend from the overall budget, and how much they plan to increase it – is a good starting point.
The Easier Way To Get Your IT budget Approved (No Matter the company size)
Boardish allows you to turn IT or cyber threats and solutions into financial figures so that you can compare your exact IT budget against company turnover and revenue.
This makes it easier for decision-makers to give you a quicker decision and fast-track the approval process.