Software & Internet Services Lead Industries in IT Spending
IT spending varies widely from industry to industry. Software Publishing and Internet Services, followed by Banking and Financial Services, spend the largest percentage of their revenue on IT, according to a Gartner report.1
Top areas in which the IT budget is allocated is to security technologies, cloud computing, business analytics, application development, and wireless/mobile, according to a survey conducted by Computerworld of IT executives.2
Thus, it makes sense that Software & Internet and Banking & Financial Services industries would allocate the largest amount of their revenue to IT spend, and industries like Natural Resources and Food & Beverages would require the least—less than 2% of their revenue. Security breaches at retailers like Target have also prompted increased spending in IT for the upcoming year. The growing popularity of cloud computing and mobile apps has also lead to an increased spending on IT.2
However, Gartner warns, IT spending as a percentage of revenue is not a reflection of its added business value.3 Companies that spent the most on IT didn’t always have the highest ROI. In fact, on average, the most successful small and mid-sized companies were more conservative than the average company regarding IT spend as a percentage of revenue.4 Successful companies accustomed to lean tech have used their IT efficiently and avoided complex, large projects while demanding quick payback.
1Gartner IT Key Metrics Data Summary Report, 2014