The Most Important Thing About Your IT Budget

Here’s something important to me and you. I just got the below reader email. I’ve taken out personally identifying information and changed his name, but here’s what it was:

Hey Jonathan,

I greatly appreciate your insight from your latest article, “How To Get More Resources For IT.” I work in ***, *** for a multi-billion dollar healthcare company. IT runs at less than 1% of revenue, I don’t know what others in our industry run at, but we feel it. I’m the sole **** *****  and myself and our “teams of one” know the pain very well. The company is not just lean, they’re mean 🙂

Thanks again.

-Mark

What is the most important part of this email to me? “Mark’s” appreciation. Thank you, sir! But the most important part of this email to YOU is the part where “Mark” reveals that he doesn’t know how resourcing levels compare with others in the industry.

“Mark” is an individual contributor, so he’s not putting together the budget. But my guess is that the department either hasn’t calculated the benchmark or hasn’t shared it.

The benchmark is the most important thing that everyone in IT must know about the IT budget.

The most important benchmark is: compared to everyone else in our industry, how much are we spending on IT as a percentage of total revenue?

That is the way — the ONLY way — to understand the level of IT investment commitment at your organization.

People talk all the time about headcount, but that is fantasy football, folks. I could plead poverty because of lack of staff, but meanwhile, I could have 10% of organizational spend dedicated to IT, and I’m hiring subcontractors and consultants like crazy — none of which show up on my headcount.

It’s about the money being spent.

That’s the investment. People, equipment, maintenance, software, tools — all of this boils down to money.

That’s the benchmark. And it’s the most important one you need in order to start having that “are we really resourced adequately” conversation.