Kathleen Hurley is the founder of Sage Inc., a tech company that offers SMB businesses infrastructure solutions and next-gen technology.
Once you understand where your technology dollars are going, you can make smarter, more strategic decisions about your business. You may not be able to charge back all tech costs to clients, write everything off on taxes or cancel every subscription—those outcomes are rare. But you will gain perspective on current spending and uncover ways to integrate technology more effectively into your operations.
For small and mid-sized businesses, technology has long been seen as a cost sink—a necessary but unprofitable line item on the P&L. Hardware, software licenses and subscriptions were often treated like copier rentals: unavoidable costs, with the hope that productivity or sales would eventually offset them.
That view isn’t wrong, but it’s no longer the only option.
With modern tools and greater visibility, leaders can evaluate technology costs differently. Reframing tech spending provides sharper insight into how technology supports operations and where it creates new value. Whether you’re leading a company, managing a team or running a project, shifting your perspective can unlock smarter strategies and clearer direction.
The Myth Of Standardization In Cost Allocation
A common approach to managing tech costs is standardization—creating a consistent hardware and software package for each department. In theory, this allows calculation of an accurate IT cost per team. In practice, standardization rarely holds up. All it takes is one employee installing a different app or subscribing to a specialized tool to break the model.
In today’s world of niche software and subscription services, IT environments change rapidly. What is “standard” this month may be obsolete the next. Maintaining a consistent departmental cost structure can be like chasing a moving target.
The Allowance Model: Empower With Guardrails
An alternative approach is to set a standard budget per department—an IT spending allowance—with built-in flexibility. Each team allocates its funds across hardware, subscriptions or specialized tools that best support its work.
This model fosters creativity and responsiveness. Teams choose tools that work for them, but within defined limits. Strong policies, approval workflows and IT oversight remain critical for security, compliance and supportability. Done well, the allowance model empowers teams while aligning technology investments with business goals.
Reporting On Reality
Even with an allowance model, legacy systems and inherited costs remain. To get a clear view of spending, leaders should start with key questions:
• Who is buying what?
• Who uses it and how often?
• When does billing occur, and how long are contracts?
Some answers will come from IT systems, some from finance, some from vendors. Consolidating this information into one dashboard or report gives leaders a fuller picture—and a stronger basis for decisions moving forward.
This may sound excessive for a small business, but even lean teams are often surprised by how many tools are in use—and how many are unmanaged. Subscription services are easy to adopt, often without formal procurement processes. Costs can quietly creep up, and software can proliferate without oversight.
From Cost Center To Competitive Edge
Regular reporting is not just budgeting. It’s an opportunity to spot inefficiencies, streamline operations and rethink how technology supports the business. With consistent insight, leaders can shift from reactive spending to strategic investing—turning technology from a sunk cost into a competitive advantage.
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