IT spending as a percent of overall revenue

IT Efficiency Metrics

IT Efficiency Metrics
The clear answer to today’s IT challenges is to increase IT efficiency throughout the infrastructure, from the desktop to the data center. This Wiki is intended to provide a forum where efficiency metrics, goals and guidelines can be shared.

Overall IT Performance Metrics

Metrics concerning the overall operations of IT, including management or people, processes, technology and budgets.
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IT spending as a percent of overall revenue

Overall IT Performance Metrics

GOAL or METRIC:

  • Commercial organizations spend  3.5% of total revenue on IT
  • Technology-intensive industries such as banking and financial services and software publishing and internet services spend 6.0% and 5.8%
  • Media and entertainment and professional services spend and average of 4.5%
  • National governments spend 8.5% of operating expenses
  • Education 4.8% of operating expense

RATIONALE: This is a measure of IT efficiency because a lower number indicates greater efficiency.   A enterprise-focused goal for IT would be to embark on a program that lowers their number, irrespective of whether they are in the ranges above or not.

SIDE NOTES: 

  • Dell IT spending as a percent of revenue is 1.49%
  • Lower figures (2.9%) are found in Asia, where labor costs are lower, in North America the average is 3.5% and in EMEA it is 4.4%
  • 'Enterprise" figures don't apply to not-for-profit organziations (education, healthcare, government, NFPs, etc.)  There are indications that in these organizations the percent of IT spend to overall budget is much higher

SOURCE:  Gartner. (2011, January 25). “IT Metrics:  IT Spending and Staffing Report, 2011


REFERENCES: 

  • http://content.dell.com/us/en/gen/d/business~solutions~whitepapers~en/Documents~data-center-efficiency-virtual-era.pdf.aspx
Comments
  • These figures again seem like arbitrary numbers thrown out by someone who has not shown his math on how efficiency is measured.