What is a good IT budget/revenue relation in percentage?


649 views4 Upvotes5 Comments

CIO in Healthcare and Biotech, 5,001 - 10,000 employees
I would say about 3 to 5%.
3
Director in Manufacturing, 1,001 - 5,000 employees
Our target was always under 2% of revenue and in some areas under 1%
For total IT it was 1.8% of revenue in a normal year.

It’s highly dependent on the type of business and it’s maturity
3
Director in Manufacturing, 1,001 - 5,000 employees
This is highly dependent on the type of business.  When I worked for a $1 billion sized engineering firm our IT budget was 3% of revenues.  Our employee base had a very high percentage of engineers and PhD chemists doing research.   Once we were purchased by a much larger $40billion dollar company our target was 2%, then 1.8%, then ... you know how it goes, to 1%.   However averaged across the company that wasn't that bad because a large percentage of the 130k employees were factory workers who didn't have assigned PC's.   I think around 60k at most had PC's.    If we were a small manufacturing company, that didn't do a lot of new engineering 1% of revenues would be very very generous.  If it was a brand new company, innovating a lot, with a high percentage of high cost talent and engineering staff, then 5% or higher might be very reasonable, or even low if you were a software company.
4
CIO in Manufacturing, 1,001 - 5,000 employees
It depends on how tech mature the industry is ,from what I have seen it’s rarely above 5% and should not be below 2% , this provides a balance between strategic investments, operational needs and innovation.
2
CEO in Services (non-Government), Self-employed
Varies by industry, company size, country, and strategic outcomes to be delivered. In large mfg enterprise leveraging on technology for competitive advantage it was 6% during periods of growth (planned M&A) but 3.5% thereafter.
3

Content you might like

Yes55%

Not always, but when possible41%

No2%


713 PARTICIPANTS

1.3k views1 Comment

CTO in Software, 201 - 500 employees
Without a doubt - Technical Debt! It's a ball and chain that creates an ever increasing drag on any organization, stifles innovation, and prevents transformation.
Read More Comments
46.8k views133 Upvotes324 Comments

Less than 1%9%

1 - 3%48%

3 - 5%24%

5 - 7%7%

More than 7%12%


225 PARTICIPANTS

3.5k views1 Comment

CIO in Education, 1,001 - 5,000 employees
We've basically had to absorb the cost and figure out how to defer other less important initiatives.
Read More Comments
2.5k views1 Upvote2 Comments