2021 IT Spending Trends — Is Your IT Budget In Line?
The more strategic you are in planning your IT expenses, the more cost-effective your organization will be. Do you know what’s involved in an accurate and effective IT budget? Discover the most prevalent IT spending trends in this series of blogs.
Are you worried about your IT budget?
It’s OK to be concerned. Whether you blow past it every year in additional support charges, or keep overinflating it because you assume your upgrades will be more expensive, it can be difficult to determine exactly what IT will cost you.
In this series of articles, we’ll explore ongoing trends in IT spending, how to approach your current and future budgets, and what your priorities should be.
3 Major IT Spending Trends In 2021
In order to properly frame a discussion of effective IT budgeting, we’ll begin by examining key trends in IT spending over the past year:
- Growth In IT Spending Is Consistent: First, it’s worth noting that the year-over-year growth in IT spending is consistent, even in light of the pandemic. Whereas spending steadily grew since 2016, it leveled off because of COVID-19. That said, it did not plummet, either. Given the generally negative economic effects of the pandemic, it’s commendable how consistent spending remained throughout 2020.
- Growth In IT Spending Is Broad: At the start of 2020, the rate of companies planning to increase their IT spending was as high as it had ever been (69%). This was curbed by the pandemic at the end of Q1, which resulted in budget cuts, and achieved a net increase of 54%.
- Growth In IT Spending Applies To All Business Sizes: No matter a business’ size, IT spending increases fell between 3% – 3.3%. The report analyzed companies from $1M to $20M+ in revenue and found generally consistent increases in IT spending.
As you can see, IT spending is growing consistently, but not drastically. Does that mean you need to increase your IT budget?
IT Budgeting Is Becoming More Effective
Your budget may be fine where it is, and if not, only in need of a slight increase (as much as 3%).
Despite these general trends of growth in IT spending, it’s important to note that CIO satisfaction with IT budgets has never been higher, and is only expected to grow. The report found that 54% of IT executives considered their IT budget to be adequate — why?
Primarily because IT ROI has improved in recent years, for one particular reason — economy of scale. Outsourcing both IT management to MSPs and hardware and software hosting to cloud providers has given businesses access to a far more effective cost for generally similar IT resources.
Put simply, it’s becoming easier to do more with the same budget.
Budget Your IT More Accurately With Expert Advice From Advantage Industries
Keep an eye out for the next article in this series on 2021 IT spending and budgeting. In the meantime, if you have any questions, get in touch with the Advantage Industries team.
Our team will help you with your IT budgeting and planning. Put our expertise to use to budget your IT more effectively.