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IT Budget vs. Company Revenue

By dmoufarrege ·
I am looking for some general guidelines on the size of an IT budget vs. company revenue.

I am trying to reset the expectations on what an IT budget should be.

My experience has been that a "proper" IT budget is somewhere between 5% and 10% ofrevenue.I need to be able to back that up. Can anyone point me to resources and research that can help with this?

Thanks,

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Risk tolerance a factor

by TJCanuck In reply to Industry differences

Apart from wide industry differences and maturity of the company, it is wise to keep in mind the risk profile of the executive leadership.
Leading & bleeding edge solutions can often be more expensive to develop / deliver / sustain than 'older' tried & true technologies. Vendors always want to drive you to get / use the latest greatest products / releases, etc. but of course that's their business!! True value to the business is in stability, reliability, and supportability. Can be costly to develop skills in-house or install/support stuff using high priced contractors with required 'new' skill sets. Often end up using the vendors "semi-professional services" to deliver what looks good on paper, but no one has much/any experience with.

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Think about business, not budget.

by Jose Mir In reply to IT Budget vs. Company Rev ...

Budget?
Companies needs to deploy the right solution.
They have to keep the tools budget (and IT is a business tool) at it's minimum expression, but without loosing focus in obtaining the right operational environment. Otherwise the business strategy could be seriously compromised.
If your company is trying to be one more in the market it's ok to adjust your budget to the different kind of list that exist for the different departments inside a specific industry classification.
But if your company is committed to succeed over competition; if it point to lead it's market niche, and if it's goals are to obtain the excellence, it will need to make it's own budget strategy and use this list just as comparison data.
When do companies worry about IT budget figures? Just when the links between Business departments and IT people are not clearly defined, so finance guys need external data to be able to set an opinion and trace rules to keep IT department under control.
If the IT strategy is delineated under the business strategy, which requires, for the different departments, good communication and business commitment, the IT budget is more accurate to the right one, and the company as a whole is capable of doing business the right way.

Jose P. Mir
jpm@jpmir.net

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Inforworld statistics

by MC_User In reply to IT Budget vs. Company Rev ...

Here are 2001 stats from infoworld.

http://www.informationweek.com/tools/IWK500?chartSource=IT+Budget&order=descending&imageField.x=33&imageField.y=6

They also have a current report on IT spending trends, but you have to purchase that one.

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yes, but

by http://purplerain.org In reply to Inforworld statistics

hi people,
Did you all from outside europe?

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