Create a Technology Budget for Creative Professional Mac Users

Ben Greiner -

If a technology budget is not already in place, please consider one of two popular scenarios:

  1. Replace everything at once, every three years. 
    This solution is often associated with a lease. Although it ensures everyone is working with up-to-date tools and the same capabilities, it can be very disruptive to replace everything in the office (and without a lease it can be very expensive).
  2. Replace 1/3 of the technology every 3 years. (or 1/4 every 4 years)
    This spreads out the cost; insures users are working with modern equipment that is under warranty; and minimizes repair and unexpected replacement costs.

Industry observers such as the Gartner Group estimate a very broad range of total cost of ownership somewhere in the $7,000 to $13,000 range (per device, per year). Fortune and The Economist magazines estimate these costs to be anywhere from $4,000 to $10,000 per device per year.

These estimates include the cost of purchasing and maintaining a workstation or server throughout it’s lifetime (typically 3-4 years in an office environment). Include hardware, software purchases, software upgrades, maintenance and support (Forget Computers fees) in your budget list. We also recommend adding software training to this list.

If you don’t have a budget, consider $4,000 per computer per year as a starting point with approximately half of that ($2,000) going toward support services (Administration, End User IT Cost) and the remaining toward Hardware, Software and Operations (hosting services).

However one must consider these reports are based on the standard office worker. Creative professionals (especially those in video) require more complex (expensive) software and storage needs beyond that of a standard office worker. In addition, our Pro Support clients spend on average 50% less on support services than the industry average (about $1,000 per computer per year).

Regarding leases… you can put hardware, software and even implementation (Forget Computers fees) on a lease!

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2 Comments

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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.

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    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%.

    SEE FULL PDF HERE

    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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