Organizations are spending more on digital transformation (DX) to stay competitive. According to the International Data Corporation (IDC) Worldwide Digital Transformation Spending Guide, global DX spending is forecast to reach $2.8 trillion in 2025 – more than double allocated in 2020.
But not all organizations that jump at increasing their information technology (IT) spending reap the benefits they hoped for, such as:
- Increased profits
- Better agility
- Higher customer satisfaction
Why? Because you must align your IT with your business strategy. This will ensure that you are getting the most out of your IT investment.
- Nearly half of CEOs reported plans to increase their rate of digital investment by 10% or more.
- Leaders are quickly adopting leading technology for a strategic advantage but often lack the desired business outcome.
The pressure of cyber threats and consumer data privacy put cybersecurity as a top priority for C-suite alliances.
- The 2022 PwC CEO survey reported that CEOs rank cyber risks as the top threat to growth.
- C-suite teams placed devastating cyber attacks as a top scenario in their 2023 resilience plans.
To maximize your IT and cybersecurity, your organization must be intentional with your tech spending. Here are 8 expert tips to get you on the strategic path.
1. Good IT Budgeting is Like Good Financial Planning
Technology is an important enabler of growth and a major driver of competitive advantage. It is an investment in your organization’s future. You must have a solid understanding of your organization’s short- and long-term goals to ensure the organization is aligning with its strategy (just like supplying personal guidance for savings and investments based upon individual goals). This is the fundamental way that you make the right IT investment choices.
You need to be realistic about your tech budget – understanding how much you want, and more importantly can afford, to spend.
Start by creating a spreadsheet that accounts for the annual minimum amount you must spend to support your IT infrastructure. Ensure this includes both recurring costs and one-time costs.
Also include a budget for your existing employees and account for any potential company growth accordingly. The amount you invest into your IT budget varies by industry needs – with an average range of 2% (construction) – 7% (banking/securities). Many industries are increasing their budgets to respond to market conditions, such as:
- Health care services
Ensure you understand your organization’s entire IT posture before making any modifications to your budget, then adjust accordingly.
It’s wise to establish a maximum IT spending threshold based on your objectives, business budget, and research. Use this threshold to prevent IT expenses from siphoning the life out of your organization.
2. Eliminate Redundant IT Resources
Tech spending shouldn’t be about investing in new, shiny IT assets. It should also be about the optimization of IT asset use. More specifically, you should strive to cut inefficiencies and redundancies.
There are many organizations that desperately cling to legacy IT assets, maintaining them alongside modern alternatives because they’re so deeply ingrained in some of their workflows that they can’t imagine life without them.
The inability to eliminate redundant IT resources leads to higher IT expenses, more downtime, and more complicated troubleshooting. An experienced provider of IT services should be able to help you root out waste by suggesting the right technologies and approaches.
3. Staff Integration with Technology
One of your biggest, time-consuming challenges you face is getting people to use the new technology and upskilling them. However, this is a critical task.
You can’t get the most of your investment if your employees aren’t using it to its full capacity (or at all). To maximize the benefits of your technologies, ensure:
- Your staff are trained on how to use it
- They feel comfortable navigating it
- Get them excited about working in a new way
- Show them how the technology will enrich their jobs and connect to the organization’s purpose
4. Cybersecurity Budget Solution for Small Businesses
Cybersecurity is just as important for small- to mid-sized businesses as it is for enterprises. Yet, they have smaller budgets and limited expertise. So, how do you protect your organization and your budget?
- Identify your current level of risk
- Prioritize your cyber protection based on the risks found
- Set improvement benchmarks to reach over time
Mitigating the largest risks first with your limited budget is your best course of action when operating with an in-house IT team. If you find that your team doesn’t have the time or experience to protect your organization, then working with a managed security service provider (MSSP) in a co-managed IT environment is your best solution.
Their expert knowledge, combined with their access to cutting-edge resources and tools at a fraction of the cost to you, make this the ideal partnership. Of course, many organizations choose to go this route before their team encounters any problems. Partnering with an MSSP gives organizations a technological and financial strategic advantage.
5. Do Your Research Before Spending Money
Just because all your competitors are using a specific IT solution doesn’t mean that it’s the best solution available. Even if the most popular solution has more bells and whistles than other similar products, it may not fulfill your organization’s needs.
Do your due diligence and research available alternatives before you make a major purchasing decision. The internet is an indispensable ally when exploring the IT landscape and comparing different products.
Review websites, like Capterra and G2, make it easy to discover what other organizations think about the products they use. There are also forums where business owners exchange tips and support one another. Of course, you can also count on your IT provider to help you make the right choice.
6. Innovate or Integrate?
It can be difficult for small- to mid-sized businesses (SMBs) to be strategic with tech spending due to limited IT experience and expertise. You want to create great experiences for customers, and you often want to have an in-house solution because you understand your customers the best.
Use funds for in-house innovation when it enhances your business in a truly differentiating way. A way that your customers are willing to pay for.
For everything else, integrate technology solutions. This will save you money – allowing you to invest into other strategic moves. Plus, it will free up time and energy for your in-house team to align with critical business goals.
7. Implement Tech Strategy Reviews
Your IT strategies are important. What’s why you should have procedures in place for reviewing them. You may discover that some IT strategies you developed have fallen out of alignment with business goals after implementation. Or that some strategies have slid in priority.
Having regularly scheduled reviews allow you to assess whether your current strategies are working for your organization and take proper action. This prevents wasted time with strategies that supply little value.
8. Set Your Organization up for Success
Where do you see your organization in one, five, or ten years? Does your current IT infrastructure support your vision, or do you need to make certain investments so that you can confidently achieve your business goals?
Questions like these can help you align your tech spending with how your business will change in the years to come. For example, if your goal is to double in size, then it makes sense to invest in solutions that can unlock the necessary scalability.
When planning, don’t forget that your needs may change in ways that you can’t reliably predict. Remember how much your needs have changed since the outbreak of the COVID-19 pandemic? The last thing you want is to be in a vendor lock-in situation – unable to use another vendor without substantial switching costs.
Related content: Tips to Help You Stop Wasting Money on Cybersecurity