How Much Are Businesses Budgeting for IT for 2022?

Updated for 2022: Determining how much a company should spend on IT can feel like walking a tightrope, especially for smaller business owners. Spend too much, and you might end up forced to skimp on other critical areas of the business; spend too little, and you might lose a competitive edge or leave your business vulnerable to hackers. So, what’s the “just right” amount that keeps everything balanced?

The truth: it depends on your business.

There isn’t a “one size fits all” magic budget number when it comes to IT (and any Managed Services Provider who tells you otherwise isn’t being honest). Every business owner should carefully analyze the company’s current IT needs and options as well as future plans for growth. That being said, it’s helpful to understand what other businesses budget each year as you determine your own allocation.

How are businesses budgeting for IT in 2022?

In 2020, the average IT spend was 8.2% of revenue (according to this report). In the 2022 State of IT report by Spiceworks Ziff Davis, 53% of businesses expect their IT budgets to grow in 2022.

What’s driving IT budget increases in 2022?

The biggest driver of this increase is the push to cloud-based tech that started during the early days of the pandemic when organizations had much (if not all) of their employees working remotely. Business owners and managers have seen the need to replace outdated technology to keep up with their competition, and there are increased security concerns as phishing scams and other attacks become more sophisticated.

Determining your company’s IT budget

Regardless of the size of your business or your industry, setting a solid strategic IT budget is very important. Here are several factors to consider:

• How much are you spending now?
• What is (or isn’t) working for you in terms of IT?
• Is your team losing productivity due to outdated technology?
• What are your business goals? 
• Are you forecasting significant growth or the addition of new locations?
• Does it make more sense to outsource IT than to bring on internal staff?

If budgeting for IT feels overwhelming, you don’t have to go it alone. A strategic Managed IT Services partner can be a great resource for you. These experts are adept at determining exactly what technology solutions your business needs to stay competitive, productive and secure, and they will help you determine exactly what your company should spend on IT each year.