Dangerously Underfunded IT: 4 Arguments to Justify Your Next Budget Request

If you’re facing pressure to support innovation and growth, with aging technology and an IT budget that barely covers maintenance, you’re not alone. 

That’s why one of the most important tools in an IT leader’s toolkit is the ability to communicate the importance of IT investment to non-technical decision makers.

Here’s how to make the case.

Organizations should spend 2-5% of gross revenue on IT

According to industry benchmarks, your IT budget should represent 2 to 5 percent of your organization’s gross business revenue. 

But many organizations allocate far less—sometimes without even realizing how far behind they are. One of R2i’s clients was allocating only 0.32% of gross revenue to IT. When the IT leader learned that 2-5% is the standard, it was suddenly very obvious why her department was struggling to keep their systems afloat. Over time, the underfunding had created severe technological debt, putting both security and competitiveness at risk. 

That organization had to fund an expensive modernization project to catch up technologically. It was both more expensive and more disruptive than properly funding IT all along would have been.

This is an important lesson for IT leaders and your higher ups: Don’t wait for a crisis to properly fund IT. Preventative investment is always more efficient than reactive overhaul.

The true cost of underfunding: How to explain technological debt

Underfunding IT sets off a chain reaction that’s difficult (and expensive) to reverse. When systems are not properly maintained or upgraded, technological debt builds up. Outdated platforms become harder to secure. Innovation slows. Technical problems get patched rather than solved.

These problems create consequences outside the IT department—serious consequences—but non-technical leadership doesn’t always realize that outdated, underfunded IT is the root problem.

To effectively advocate for the funding you need, it’s important to connect technological debt to these larger business consequences.

Four business arguments to secure a better IT budget

When it’s time to advocate for a stronger budget, arm yourself with arguments that resonate beyond the IT department. These four are the most effective:

1. You can’t lead the market with outdated technology

Falling behind in IT means falling behind in every part of the business. Your competitors are upgrading, automating, and innovating. If you’re not, you’re losing ground.

2. Outdated technology frustrates employees and drives away talent

Slow, inefficient tools waste time and erode morale. Skilled staff expect modern systems that help them do their best work. If you want to attract and retain talent, your IT infrastructure needs to support them.

3. Security risks are higher and harder to manage

Old systems are harder to patch, harder to monitor, and more vulnerable to attacks. Cybersecurity breaches can cost millions, permanently damage trust, and even spell the end of your business. Up-to-date infrastructure is your first line of defense.

4. Catching up is far more expensive than keeping up

Once technological debt accumulates, correcting it often requires significant downtime, re-architecture, and re-training. Ongoing investment is a fraction of the cost—and far less disruptive.

Make your next budget ask count

As an IT leader, you already know how much hinges on reliable, secure, and scalable systems. But leadership teams often need help connecting those systems to business outcomes.

Use clear language. Make the risks real. And back up your request with benchmarks and case studies. A modest investment now could save your organization from a costly reckoning later—and position IT as a strategic partner, not a cost center.