How Much Should You Be Spending on IT in 2026?

For CFOs and Controllers, IT spending has shifted from a background expense to a line item that directly impacts risk, compliance, and financial predictability. In 2026, the question is no longer whether IT deserves a meaningful budget. The real question is how much is appropriate for your business and how to structure that spend without surprises. 

This article breaks down realistic IT budget benchmarks, what those numbers should include, and how financial leaders can plan with confidence. 

The 2026 IT Budget Benchmark for SMBs 

Recent benchmarking research from Avasant’s 2024/2025 IT Spending and Staffing Benchmarks shows that IT spending as a percentage of revenue continues to rise across organizations. While exact ratios vary by industry and size, midsize organizations commonly fall within a mid-single-digit to high-single-digit percentage range (5-8%) when accounting for operational IT, security, and business support functions.  

Where your organization lands within that range depends on three factors: 

• Regulatory and compliance requirements 
• Cybersecurity and insurance expectations 
• Internal reliance on technology for daily operations

For example, professional services firms, financial organizations, and healthcare providers often trend toward the higher end of the range due to security and compliance obligations. Businesses with simpler environments may remain closer to the lower end. 

The key takeaway for finance leaders is this: underfunded IT often leads to unpredictable downstream costs. 

What That Budget Should Actually Cover 

One of the most common budgeting challenges CFOs face is fragmented IT spend. Costs appear reasonable in isolation but add up quickly when reviewed holistically. A well-structured IT budget in 2026 should account for: 

1. Core IT Operations: This includes user support, device management, patching, backups, and vendor coordination. These functions keep the business running smoothly and employees productive. 

2. Cybersecurity and Risk Management: Security is no longer optional overhead. Cyber insurance providers, auditors, and clients increasingly expect layered protection, incident response planning, and documented controls. 

3. Strategic Planning and Lifecycle Management: Hardware refresh cycles, software roadmaps, and cloud optimization reduce emergency purchases and allow expenses to be forecasted years in advance. 

When these areas are bundled into a single, well-defined model, finance teams gain visibility and control.  

Why Under-Spending Creates Financial Risk 

From a finance perspective, inconsistent IT investment introduces volatility. Common cost drivers include: 

• Emergency hardware replacements 
• Unplanned downtime and lost productivity 
• Security incidents that trigger insurance increases 
• Audit remediation work that could have been avoided

These expenses rarely appear in the original IT budget, yet they directly impact cash flow and forecasting accuracy. Predictable spending reduces exposure to these scenarios.

Flat-Rate IT Models and Budget Confidence 

Many CFOs are shifting toward flat-rate, all-inclusive IT agreements because they simplify forecasting. 

This model provides: 

• A consistent monthly operating expense 
• Fewer surprise invoices 
• Clear alignment between services delivered and dollars spent

When onsite support, cybersecurity tooling, and planning are included rather than billed separately, finance leaders gain clarity and stability. This approach also supports cleaner audits and stronger internal controls.

How to Pressure-Test Your 2026 IT Budget 

Before finalizing next year’s numbers, CFOs should ask a few practical questions: 

• Are IT costs predictable month to month? 
• Does the budget include security, response planning, and reporting? 
• Can leadership explain how IT spending supports risk reduction and growth? 
• Are there hidden vendor or project costs outside the main IT line item?

If these answers feel unclear, the issue is often structure rather than spend.

Final Thought: IT Spend Is a Financial Control 

In 2026, IT budgeting is less about technology and more about governance. The right level of investment supports compliance, reduces volatility, and gives leadership confidence in long-term planning. 

For CFOs, the goal is simple. A stable, transparent IT budget that delivers peace of mind. 

Want Help Validating Your IT Budget? 

Starport works with finance leaders across Canada to create predictable, audit-ready IT cost models. If you would like a second opinion on your 2026 IT budget, schedule a discovery call and get clarity before the next planning cycle.