Create a Technology Budget for Mac Users

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  • Ben Greiner

    The average IT budget as a percentage of revenue is 5.2% according to the Dec/Jan 2013 issue of CIO magazine.

  • Ben Greiner

    When it comes to IT spending as a percent of revenue, Gartner reports that the Industry Average for Healthcare Providers in 2016 was 4.1%.

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    IT spending as a percent of revenue is the most recognized measure of total IT investment relative to top­line business results.

    The value of this measure is that it assists in identifying the competitiveness of investment levels relative to the most fundamental measure of business performance: revenue. While this has been viewed as a must­-have and readily available metric for many enterprises, common misuses include:

    • Looking at a single year rather than multiyear trends
    • Basing decisions on the assumption that this figure will not change in the future, sometimes dramatically
    • Failing to understand and address changes in the numerator and the denominator of the calculation
    • Considering just the average rather than the range of values or the upper and lower quartiles

    IT spending as a percent of revenue alone does not highlight why spending levels are at, above or below average (which are often misinterpreted as "good" or "bad"), nor does it reflect IT's contribution to business performance. Thus, IT spending as a percent of revenue needs to be considered in tandem with other IT intensity measures, as well as the context of business objectives, the rate of change and the overall circumstances affecting the numerator, as well as the denominator, of the calculation.

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