Don’t Let Outdated Tech Hold You Back

Why Investing in IT Is Key for Rural Businesses – The Hidden Costs of Outdated Technology

Many small businesses and organizations in rural areas — from local nonprofits and government offices to clinics, farms, accounting firms, and law practices — try to “make do” with old software and hardware. It’s understandable: budgets are tight, and new IT systems can seem expensive. However, maintaining outdated tech can be more detrimental than you think. Consider the risks:

1. Inefficiency: Old computers and legacy software tend to be slow, prone to crashes, and often don’t integrate with newer tools. This means your staff spends extra time on tasks that modern systems could handle in seconds. In short, outdated tech wastes employee time and productivity, which costs your business money in the long run.
2. Security Risks: Older software may no longer receive security updates, making it an easy target for hackers. Cyber threats like ransomware often exploit unpatched, outdated systems. Underinvesting in IT security leaves you vulnerable to data breaches that could expose sensitive customer information or even force you offline. Even government agencies invest heavily (around 13% of their budgets) in IT, largely due to security needs – a breach or system failure can be that damaging. If big agencies consider IT security a top priority, small businesses should take note.
3. Stifled Growth: Technology should help your business grow – but if your systems are stuck in the past, they might be holding you back. Outdated software might not support new services or efficient online customer experiences, and aging hardware could limit adoption of modern tools (from data analytics to mobile apps). In sectors like healthcare or finance, for example, using up-to-date digital systems is critical for serving clients efficiently and staying compliant with regulations. If your tech can’t support things like telehealth services, online bill pay, or modern data reporting, you risk falling behind competitors who can. In a nutshell, clinging to old tech means missing out on opportunities to improve and expand your services.

How Much Should You Spend on IT? (2024 Benchmarks)

You might be wondering what a “normal” IT budget looks like for a business of your size or in your industry. Gartner’s 2024 IT spending benchmarks provide a helpful yardstick. In simple terms, most midsized companies (with $50M–$1B revenue) spend about 3.1% of their revenue on IT, on average. Of course, this percentage varies by industry: some industries invest a lot more, others less.

Figure: IT Spending as a Percentage of Revenue by Industry (Projected for 2025). Each bar shows the average IT spend as a share of revenue in that sector. The cross-industry median is about 3.1% (blue line). Notice how sectors like Banking & Finance (~6.6%), Software/Tech (~6.2%), and Education (~6.0%) invest a higher portion of their revenue in IT, whereas industries like Construction/Natural Resources (~1.2%) and Energy (~0.9%) spend far less. If your business’s IT spending is well below the industry norm (or only a percent or two of revenue), it likely means underinvestment in technology.

Why do these percentages matter? They show that successful organizations treat IT spending as an important investment, not just an overhead cost. Even traditionally low-tech sectors are starting to spend more on IT to stay competitive. And it’s not just for-profit businesses: public and nonprofit sectors also allocate significant budget to IT. For example, national government agencies dedicate about 13% of their operating budgets to IT, in part to strengthen cybersecurity and modernize old systems. Local governments and educational institutions also average around 5–6% of their budgets on IT. The takeaway for a small rural business? If you’re only spending a minimal amount on IT (or nothing beyond break-fix emergencies), you’re likely falling behind. Most organizations your size are investing in technology because it’s become essential for day-to-day operations and long-term survival.

Run, Grow, Transform: Investing in Today and Tomorrow

It’s not just how much you spend on IT, but how you spend it. Gartner often breaks down IT spending into three categories: “Run, Grow, and Transform.” In plain language:

• Run – Keeping the lights on. These are expenses to maintain your current operations: fixing computers, paying for existing software licenses, managing networks, etc. (Basically, the costs to run your business as-is.)
• Grow – Enhancing and expanding what you have. This includes improvements that help you do more or do it better, like adding a new feature to your website, buying software to serve customers online, or implementing a tool that makes your staff more productive. These investments help grow your capabilities and capacity.
• Transform – Big leaps and new opportunities. This is spending on new technologies or strategies that transform how you do business. Think of things like adopting data analytics or AI for the first time, launching a digital service that didn’t exist before, or overhauling an old manual process with a fully automated solution. Transformative projects can be game-changers for efficiency or new revenue, but they often require vision and upfront investment.

According to Gartner’s data, the average company spends about 75% of their IT budget on “Run,” roughly 15% on “Grow,” and around 10% on “Transform” initiatives. In other words, while the bulk of IT resources go toward keeping things running, healthy organizations still dedicate a significant chunk (around one-quarter of their IT budget combined) to improvement and innovation. In fact, industry leaders often allocate even more to growth and transformation. Some of the most profitable sectors put 25% or more of IT spending into Grow and Transform efforts. They recognize that investing in new solutions leads to better outcomes – one analysis even found that banks with higher digital investment achieved nearly double the profit margins of those lagging behind.

Now, ask yourself: Where is your IT budget going? If almost every dollar is spent on fighting fires – repairing old equipment, patching outdated software, or other “Run” costs – then you have little left to make things better. That’s a problem. It means you’re stuck in maintenance mode while more tech-savvy competitors forge ahead. Gartner recommends aiming for at least ~15% of your IT spending to go toward growth initiatives, and around 10% for transformative projects that prepare your business for the future. For a small business, this could be as simple as setting aside part of your budget for a few key upgrades each year: for example, upgrading an old accounting system (a growth improvement), or starting a pilot program to digitize your paper records into an online database (a transformative step). The exact numbers aren’t as important as the mindset: some portion of your resources should consistently go into making your tech better – not just keeping it barely running.

If you’re in an industry that historically doesn’t spend much on IT (say, agriculture or construction), this is actually an opportunity. Your larger peers might not be investing in tech, but you can gain an edge by strategically investing in IT where it matters most. Find a pain point or an inefficient process in your business and see if a technology solution exists to improve it. Smart, targeted IT investments can help a small rural business punch above its weight and compete even with bigger players.

Don’t Skimp on Security and User Experience

Two areas you definitely don’t want to overlook are security and end-user experience (i.e. how your employees and customers interact with your technology). Modern IT spending isn’t just about fancy new apps; it’s about protecting your business and enabling the people who rely on your tech every day.

• Security is Non-Negotiable: In today’s world of malware and hacking, security is a must-have part of your IT budget. This includes things like up-to-date antivirus software, firewalls, data backups, and training your staff on cybersecurity practices. If your computers still run on Windows 7 or your server hasn’t seen a security patch in years, you’re one incident away from a major crisis. Many organizations, big and small, now allocate a significant share of their IT spend specifically to security – and with good reason. For example, companies often devote roughly 25–33% of their IT security budgets to external security experts or services. They bring in outside help for things like 24/7 network monitoring or cybersecurity assessments, because it “takes a village” to stay safe online. If you don’t have any dedicated security measures or expertise, consider partnering with an IT security service (it can be more affordable than hiring full-time staff, and you get peace of mind that pros are watching your back). The bottom line: protecting your data and systems is as critical as locking the doors to your office at night. Don’t leave it to chance.
• Support Your Users (Employees and Customers): Another often overlooked aspect of IT is end-user services – basically, the tools and support that help your team do their jobs efficiently (and help customers get a smooth experience). This could range from the devices your staff use (PCs, tablets, point-of-sale systems) to the helpdesk that troubleshoots issues, and the software interfaces your employees and customers interact with daily. On average, about 13% of a company’s IT budget goes toward supporting and improving end-user services (things like device management, IT helpdesk, and user-facing applications). Think about that: more than a tenth of IT spending is dedicated to making sure the people using the technology have a good experience. Why? Because if your employees are constantly frustrated by clunky, outdated systems, their productivity and morale plummet. And if your customers find your online portal or payment system difficult to use, they might not come back. In education, for instance, schools and universities put roughly 20% of IT spending into enhancing the digital experience for students – because if it’s too painful to access class materials or submit homework online, students disengage. The same principle applies to any business: make technology user-friendly.

Are your employees using three different old programs just to complete one task (for example, copy-pasting data between an ancient accounting system and a separate reporting tool)? That’s a sign it’s time to streamline. Modern software could likely handle that whole workflow in one place, saving time and reducing errors. As the Gartner report notes, when people have to log into many disjointed apps to get work done, “it becomes exhausting for the end-user”. Simplifying and modernizing that experience isn’t a luxury — it improves efficiency and job satisfaction. Even small steps, like upgrading to a more intuitive billing software or providing a single sign-on for multiple apps, can make your team’s day-to-day much easier. Happy, efficient employees translate to happier customers and a healthier business.

Modern Infrastructure: Foundation for Future Growth

Modernizing your IT isn’t just about solving today’s problems — it’s about preparing your business for the future. Technology is evolving fast. Tools like cloud computing, data analytics, and AI (artificial intelligence) are becoming more accessible to organizations of all sizes. But to take advantage of them, you need a solid digital foundation.

Think of it this way: if your data is locked in paper files or in an old database that only one aging computer can read, you can’t readily use that information to make better decisions. If your internet connection or network gear can’t handle modern cloud applications, you won’t be able to leverage flexible solutions like remote work tools or online customer services. Investing in modern IT infrastructure — things like reliable high-speed networking, cloud-based backups, up-to-date software platforms — gives your business the agility to adapt when new opportunities or challenges arise.

A great example from the nonprofit world: Organizations now need to demonstrate their impact with data. Nonprofits are increasingly asked to prove that every dollar of funding creates results, and that means having systems in place to track outcomes and generate reports. In response, savvy nonprofits are starting to build data strategies, using modern databases and analytics (often cloud-based) to measure their programs. As one IT advisor put it, “Great reporting used to be a ‘nice-to-have’ but is now a necessity”. This is true for small businesses too — whether it’s tracking customer trends, monitoring crop yields, or analyzing financial metrics, good data (and the IT tools to harness it) can guide smarter decisions.

Modern infrastructure also reduces what tech folks call “technical debt.” That’s the extra cost and hassle you incur down the road by avoiding upgrades today. For instance, skipping a software update might save money now, but a year from now you might end up paying double to fix an emergency failure or to migrate to a new system under pressure. According to Gartner, the labor and time spent supporting aging, inefficient systems grows rapidly if upgrades are continuously deferred. In other words, the longer you wait, the more you’ll spend keeping that old system on life support – until it eventually fails. By contrast, proactively investing in modern tech (even gradually) spreads out costs and avoids those nasty surprise expenses. It’s like maintaining a piece of equipment: regular tune-ups are far cheaper than catastrophic repairs.

Finally, modernizing your IT enables innovation. When your software and hardware are up-to-date, you can more easily adopt new tools that help your business. Want to start selling products online? It’s much simpler if your inventory and billing systems are already digital and cloud-ready. Interested in using data insights to improve operations? You’ll need a centralized, well-structured data repository first. The “Transform” investments we discussed earlier – perhaps setting up a customer relationship management (CRM) system or an e-commerce platform – become much more feasible once you have the basics in place. And you don’t have to do it all at once; you can plan a roadmap. For example, this year upgrade your most critical software, next year move your file storage to a secure cloud service, and so on. The key is to start pivoting from a reactive stance (only fixing tech when it breaks) to a proactive strategy (gradually building the IT capabilities you’ll need for the next 5–10 years).

Ready to Modernize? We Can Help

Embracing modern IT might feel overwhelming, especially if you’re used to squeezing every last drop of life out of your old equipment. But remember, technology investment is not just an expense — it’s an investment in your business’s efficiency, security, and future growth. The data shows that organizations who invest wisely in IT often outperform those who don’t. Underinvesting, on the other hand, can leave you vulnerable to everything from cyberattacks to losing customers because you can’t meet their digital expectations.

The good news is you don’t have to navigate this journey alone. Whether you need to assess your current setup, figure out an appropriate IT budget, or implement upgrades step by step, Illini Tech Services is here to help. We specialize in guiding small businesses and institutions in central Illinois (just like yours) toward affordable, effective tech solutions. Our team can help you compare your current IT spending to industry benchmarks, identify the highest-priority improvements, and craft a modernization plan that fits your budget and needs.

Don’t wait until a system failure or security breach forces your hand. Be proactive and take the first step toward a more secure and efficient future for your business. Give us a call at 217-854-6260, drop us an email at [email protected], or visit our website at illinitechs.com. We’re happy to chat about how to upgrade your technology infrastructure in a sensible, sustainable way. Modernizing your IT can feel like a big leap, but with the right partner, it’s absolutely achievable — and it can make all the difference in keeping your rural business thriving for years to come.