^{Read time: 3 min}

Your 2025 IT Budget Guide: Top Tips and Industry Benchmarks‍

Getting your IT budget right is about more than just balancing the books—it’s about setting up your organization to thrive in a tech-driven world. In this blog, we'll explore essential tips for IT budgeting and planning, along with benchmark numbers to support decision-making.

1. Align IT Strategy with Business Objectives

Companies spend an average of 3.6% of revenue on IT, according to Gartner. But if you're in industries like financial services or high-tech, you might see that number climb to 7-8%.

Tip: Before diving into the details, make sure your IT strategy is aligned with the company’s big-picture goals. Whether it’s improving customer experience, streamlining operations, or driving innovation, your IT spend should support these objectives. Get together with business leaders early to understand their priorities, so you can invest in areas that will truly move the needle.

2. Prioritize Cybersecurity

On average, organizations spend about 10% of their IT budget on security, but highly regulated industries might push that to 12-15%.

Tip: With the rise in data breaches, cybersecurity should be front and center in your budget. Don’t just think of it as protection—think of it as preventing some serious headaches (and costs) down the road. Make sure you’re covering both proactive security measures and having an incident response plan in place.

3. Embrace Cloud and Virtualization

Businesses are spending about 30% of their IT budget on cloud services, and the more cloud-forward organizations are spending as much as 50%.

Tip: Cloud services are here to stay, and they’re only growing. Whether it’s IaaS, PaaS, or SaaS, these solutions offer flexibility and can help cut capital expenditures. As you plan your budget, factor in the savings and scalability the cloud can bring.

4.  Invest in Emerging Technologies

Right now, companies are putting 5-10% of their budget towards innovation and emerging tech—and that number is growing.‍

Tip: AI, machine learning, IoT—these aren’t just buzzwords anymore. These emerging technologies are reshaping industries. Even if you’re not going all-in, set aside part of your budget for R&D or pilot projects to keep your business ahead of the curve.

5.  Plan for IT Infrastructure Upgrades

Infrastructure typically takes up 20-25% of the IT budget, though this can vary based on hardware refresh cycles.

Tip: Outdated infrastructure can slow you down and rack up maintenance costs. Regularly check in on your systems and plan for upgrades where it makes sense. While cutting corners on modernization might save in the short term, the long-term gains often make it worth the investment.

6. Focus on Talent Development

This may be a surprise to some, but companies often allocate 5% or more of their IT budget to talent development for certification and training.

Tip: Your IT team is just as critical as the technology they work with. Keep your team sharp by investing in training and certifications. Talent retention strategies are also key, especially in such a fast-evolving field. Set aside budget for upskilling and keeping your team engaged.

7. Implement Continuous Monitoring and Optimization

Companies with mature IT governance save around 5-10% of their budget through continuous optimization.

Tip: Your IT budget shouldn’t be a “set it and forget it” deal. Continuous monitoring lets you keep tabs on how your spending is matching up with your projections, allowing for course corrections mid-year if needed. It’s a great way to stay efficient and make sure your investments are paying off.

8. Plan for Contingencies

Best practices suggest setting aside 3-5% of your IT budget for those just-in-case scenarios.

Tip: Let’s face it—unexpected expenses are going to happen. Whether it’s a security breach or a sudden need for extra resources, building a buffer into your budget can save you from scrambling later.

‍

Conclusion

By aligning your IT plans with business goals, staying ahead in cybersecurity, and investing in emerging tech and talent, you’ll build a budget that fuels long-term growth. Use these benchmarks as a starting point, but don’t forget to tailor your strategy to your unique needs.