As the year draws to a close, businesses across the globe are assessing their performance and planning their budgets for the upcoming year. In the restaurant industry, which has faced significant volatility, the budget process is more critical than ever, particularly when it comes to IT spending. In this ConStrata Minute, Toby Malbec explores the evolving landscape of IT budgets and their impact on revenue generation and cost containment.

The importance of IT budgeting cannot be overstated, especially in a sector that has seen dramatic changes in recent years. Technology is now central to many revenue-generating and cost-saving initiatives, making proper budgeting crucial. Organizations must carefully distribute their IT budgets between maintaining current operations and investing in strategic advancements that drive growth.

One of the key topics we discuss is the trend in IT spending. According to Statista, IT spending as a share of revenue rose from 7% in 2022 to 10% in 2023. While this figure may be inflated due to the inclusion of retailers with heavy online investments, it provides a starting point for restaurants to consider. ConStrata’s own research from 2019 indicated that restaurants spent approximately 2.7% on IT, but this was before the significant shift to delivery and drive-thru services brought on by the pandemic. We speculate that the current target range for foodservice IT spending is likely between 5% and 6%.

If your organization is not budgeting in this range or higher, you risk falling behind or incurring technology debt. This ConStrata Minute provides insights into how restaurants can effectively allocate their IT budgets to stay competitive. We also touch on the importance of strategic IT investments in driving revenue and containing costs.

It’s clear that IT budgeting is a hotly debated topic with no one-size-fits-all answer. However, by understanding industry trends and carefully planning your budget, you can position your organization for success in 2024. Tune in to this episode to learn more about the critical role of IT budgeting in the restaurant industry and how you can optimize your spending for the year ahead.