MeasureIT Industry Benchmarking Report

IT Financial Metrics: Business and Professional Services

Introduction

This report is representative of the IT spending practices of an average business/professional services organization. Detailed demographics and peer group information are available on page six of this report. While you will find this report useful as a gauge for evaluating your industry as a whole, you may find a report containing your own answers benchmarked against your industry to be more helpful.

How to get your own Custom Report

To generate a report like this one specific to your organization, visit the MeasureIT program pages:

MeasureIT for Budgeting

MeasureIT for Staffing

All of the metrics included in this industry report will be customized based on your responses to an in-depth questionnaire. You report is generated immediately once you have answered the questions.

Please visit one of the links above to build your own benchmarking report.

MeasureIT Industry Benchmarking Report IT Financial Metrics: Business and Professional Services

Respondent name: Sample Bus & Prof SvcCompany name: Info-TechRespondant Email: BPSvc@infotech.com

Executive Summary

The following table identifies how your high level financial metrics compare those of your peer group.

Your metric value Your quartile rank 25th Percentile Median 75th Percentile Number of PeersOperational budget to revenue 5.09% 3rd 0.61% 2.35% 8.33% 40Operational budget to staff $7,200 3rd $1,333 $2,500 $7,200 40Operational budget to IT staff $270,000 4th $57,143 $87,500 $137,500 40Capital budget to revenue 1.34% 3rd 0.34% 0.64% 2.08% 40Capital budget to staff $1,893 3rd $594 $1,653 $2,613 40Capital budget to IT staff $71,000 3rd $13,125 $28,571 $72,537 40

At a high level your spending levels appear to be in-line with your peers.You should be striking a reasonable balance between spending and providing service to the business.Review the metrics that follow in more detail to determine how you compare to your peers.

Benchmarking Goes Beyond Cost Justification/Savings

Use metrics to benchmark, analyze, and track performance. Consider your operational and capital spendingversus various peer groups

Metrics and benchmarking information can help diagnose problem areas early and point to areas

for improvement

Making decisions about spending levels in a bubble is challenging — benchmarking metrics can help makethe right decisions

Set goals to better align spending with peer groups and right-size operational and capital budgeting with bestpractice IT shops

Use benchmarking data to help management and staff understand what they are accountable for — and why

Good benchmarking information can form the foundation for continuous improvement in many areas - including IT spending.

Info-Tech's MeasureIT Financial Metrics Overview

This custom benchmarking report provides you with:

• Metrics to help understand how your IT budgeting levels compare to your peers

• High level comparisons of key top level metrics

• Detailed granular financial metrics

• Implications of your individual financial metrics compared to your peer group

• An action plan to help with your particular situation

• Recommended research to help you take the steps necessary to optimize spending levels

This benchmarking report is customized for you, and compares your metrics to:

• A custom peer group containing enterprises that match you as closely as possible

• Your peer group is defined by demographic information, such as industry, size (revenue and staff), complexity,growth (revenue and IT budget), and involvement in outsourcing

• In addition to comparisons with your custom peer group throughout the metrics overview, key top level metrics also compare yourmetrics to other organizations based on the criteria outlined above (i.e. compare your metric to all others in your industry withoutconsideration for other variables)

Your Peer Group Below is the composition of your peer group based on your demographic information. Your peer group is comprised of others in your industry with similar sized IT groups, number of users supported by the IT group, planned IT spending, gross revenue, and percentage of IT servicesthat are outsourced.

Box Plot (a.k.a. Box and Whisker) Graphs Explained

Box plot graphs are highly informative and simple to interpret.They show on the same graph: • The median of all responses • The range of responses. You should never compare yourself to asimple median or simple average. Knowing where you fall within therange can help you determine how closely your results resemble thebulk of your peers. Box plot elements: • The thin while line: the median value (the value where 50% ofrespondents had a higher result and where 50% of the respondents hada lower result) • The “tails”: show the range of responses from the 15th percentile (theresponse where only 15% of metric values were lower) to the 85thpercentile (the response where only 15% of metric values were higher)• The thick orange line – the value of your metricBox plot interpretation:• Inside the “box”: your metric value falls within the middle 50 percent ofrespondents. You can consider yourself “in-line” with your peers.• On the “tails”: your metric value is either lower or higher than the bulkof your peers, but not unexpected – within range but on the low or highside. Keep this result in mind as you review other metrics since it mightbe an indicator of performance issues.• Outside the range: your metric value is outside, either much lower ormuch higher than what would normally be expected. Consider carefullywhy your value is extreme. This is a strong indicator of potentialproblems.

Top Level Metric - Operational Budget as a Percentage of Revenue

This chart compares the operationalspending of your IT organizationrelative to the revenue of yourcomposite peer group. Generally, if your metric value is in-linewith your peers (inside the "box") therelative operational spending of your ITorganization is reasonable comparedto your peers. If you fall on or abovethe upper tail, your operationalspending level exceeds that of most ofyour peers. You should investigate whyyour organization is spending morethan your peers. If you fall on or belowthe lower tail, you operational spendingtrails that of most of your peers. If thisis the case, you should investigatewhether your organization is highlyefficient or whether you areunder-spending.

This table compares your metric value to various highs and lows: the highest median value across all industries, lowest median value across all industries, themedian value of your peer group, the 85th percentile value reported in your industry and the 15th percentile reported in your industry. Please note that yourindustry high and low should show the 85th and 15th percentiles respectively, not the absolute high and low which will almost always be outliers.

Your Metric Highest Industry Median Lowest Industry Median Peer Group Median Your Industry High Your Industry Low5.09% 3.93% 0.76% 2.35% 25.44% 0.72%

Operational Budget as a Percentage of Revenue – Different Perspectives

This chart shows your operationalbudget relative to revenue, andcompares it to different peer groups asdefined by a single demographicfactor.You can see, at a glance, how yourrelative spending level compares toother organizations with similar:•Growth in Capital Budget•Growth in Operating Budget•Involvement in Outsourcing•Size based on Revenue•Industry

This table shows how your operational budget as a percentage of revenue compares to others with similar Capital and Operational Budget Growth, OutsourcingActivities, Size, and Industry.

Your Metric Capital Budget Median Operating Budget Median Outsourcing Median Size Median Industry Median5.09% 1.71% 1.95% 1.76% 1.11% 2.56%

Top Level Metric – Capital Budget as a Percentage of Revenue

This chart compares the capitalspending of your IT organizationrelative to the revenue of yourcomposite peer group. •Generally, if your metric value isin-line with your peers (inside the“box”) the relative capital spending ofyour IT organization is reasonablecompared to your peers. If you fall onor above the upper tail, your capitalspending level exceeds that of most ofyour peers. You should investigate whyyour organization is spending morethan your peers. If you fall on or belowthe lower tail, you capital spendingtrails that of most of your peers. If thisis the case, you should investigatewhether your organization is highlyefficient or whether you areunder-spending.

This table compares your metric value to various highs and lows: the highest median value across all industries, lowest median value across all industries, themedian value of your peer group, the 85th percentile value reported in your industry and the 15th percentile reported in your industry. Please note that yourindustry high and low should show the 85th and 15th percentiles respectively, not the absolute high and low which will almost always be outliers.

Your Metric Highest Industry Median Lowest Industry Median Peer Group Median Your Industry High Your Industry Low1.34% 1.43% 0.17% 0.59% 9.50% 0.20%

Capital Budget as a Percentage of Revenue – Different Perspectives

This chart shows your capital budgetrelative to the revenue, and comparesit to different peer groups as defined bya single demographic. You can see, at a glance, how yourrelative spending level compares toother organizations with similar:•Growth in Capital Budget•Growth in Operating Budget•Involvement in Outsourcing•Size based on Revenue•Industry

This table shows how your capital budget as a percentage of revenue compares to others with similar Capital and Operational Budget Growth, OutsourcingActivities, Size, and Industry,

Your Metric Capital Budget Median Operating Budget Median Outsourcing Median Size Median Industry Median1.34% 0.52% 0.63% 0.59% 0.60% 0.96%

Second Level Metrics – Operational Budget to IT Staff

This chart compares your operationalbudget relative to number of IT staffand compares it to your compositepeer group, to enterprises of similarsize and to those in your industry . • A metric value on or beyond the righttail suggests that operational spendingrelative to IT staff is higher than yourpeers. Consider where opportunitiesmay exist to reduce operationalspending. A metric value on or beyondthe left tail, suggests that youroperational spending is significantlylower than your peer group . Considerwhere opportunities may exist to alignoperational spending with your peers.

Second Level Metrics – Capital Budget to IT Staff

This chart shows your capital budgetrelative to number of IT staff andcompares it to your composite peergroup, to enterprises of similar sizeand to those in your industry. • A metric value on or beyond the righttail suggests that capital spendingrelative to IT staff is higher than yourpeers. Consider where opportunitiesmay exist to reduce capital spending. Ametric value on or beyond the left tail,suggests that your capital spending issignificantly lower than your peergroup. Consider where opportunitiesmay exist to align capital spending withyour peers.

Second Level Metrics – Operational Budget Growth

This chart compares howchanges in your operationalbudget growth levels comparewith your composite peergroup, within enterprises ofsimilar size and the sameindustry. • A metric value on or beyondthe right tail suggests that youhave experienced greatergrowth than most of yourpeers. Consider the rationalefor this growth and whether,given company performanceand economic conditions, thislevel of growth can be justified.A metric value on or beyondthe left tail, suggests that youhave experienced slowergrowth or greater contractionthan most of your peers.Consider the drivers motivatingyour slow growth orcontraction to determine if thispace is appropriate givencompany performance andstrategic objectives.

Second Level Metrics – Capital Budget Growth

This chart compares how changes inyour capital budget growth levelscompare with your composite peergroup, within enterprises of similar sizeand the same industry. • A metric value on or beyond the righttail suggests that you haveexperienced greater growth than mostof your peers. Consider the rationalefor this growth and whether, givencompany performance and economicconditions, this level of growth can bejustified. A metric value on or beyondthe left tail suggests that you haveexperienced slower growth or greatercontraction than most of your peers.Consider the drivers motivating yourslow growth or contraction and whetherthis pace is appropriate given companyperformance and strategic objectives.

Detailed Financial Metrics – Operational Budgeting

Detailed Financial Metrics – Capital Budgeting

MeasureIT Industry Benchmarking Report

IT Staffing Metrics: Business and Professional Services

Introduction

This report is representative of the IT staffing practices of an average business/professional services organization. Detailed demographics and peer group information are available on page six of this report. While you will find this report useful as a gauge for evaluating your industry as a whole, you may find a report containing your own answers benchmarked against your industry to be more helpful.

How to get your own Custom Report

To generate a report like this one specific to your organization, visit the MeasureIT program pages:

MeasureIT for Budgeting

MeasureIT for Staffing

All of the metrics included in this industry report will be customized based on your responses to an in-depth questionnaire. You report is generated immediately once you have answered the questions.

Please visit one of the links above to build your own benchmarking report.

MeasureIT Industry Benchmarking Report IT Staffing Metrics: Business and Professional Services

Respondent name: Sample Bus & Prof SvcCompany name: Info-TechRespondant Email: BPSvc@infotech.com

Executive SummaryThe following table identifies how your high level staffing metrics compare to those of your peer group.

Your metric value Your quartile rank 25th Percentile Median 75th Percentile Number of PeersIT staff to all staff 2.67% 2nd 1.63% 2.72% 6.50% 40IT staff to all users 2.67% 3rd 1.50% 2.55% 5.00% 40Annual gross revenue to IT staff $5,300,000 2nd $475,000 $5,507,143 $8,678,571 40

At a high level you appear to be staffed in-line with your peers.There may be opportunities to better align staffing levels with business requirements in specific areas.Review the metrics that follow in more detail to determine how you compare to your peers.

Benchmarking Goes Beyond Cost Justification/Savings

Use metrics to benchmark, analyze, and track performance. Consider your operational and capital spendingversus various peer groups.

Analyze metrics and benchmarking information to identify potential problem areas early and determineareas for improvement.

Avoid making decisions about staff levels in a vacuum – benchmarks can provide important metricsconcerning peers, resulting in more informed conclusions.

Set goals to align staffing levels and staffing mix with best practice IT organizations.

Use benchmarking data to help management and staff understand what they are accountable for — and why

Apply benchmarking information as a foundation for continuous improvement in many areas – including IT Staffing.

Info-Tech's MeasureIT Staffing Metrics Overview

This custom benchmarking report provides you with:

• Top line metrics to help understand how your IT staffing levels compare to your peers

• Detailed staffing metrics including staff activity, staff mix, and staff experience

• An interpretation of your results compared to your peer group

• Suggested actions to consider to change your results

• Recommended research…

This benchmarking report is customized for you, and compares your metrics to:

• A custom peer group containing enterprises that match you as closely as possible.

• Your peer group is compiled based on multiple demographic factors including: industry, number of employees, revenue, revenue growth, IT budget growth, complexity. and involvement in outsourcing

• In addition to your composite peer group, top line metrics are compared to peers with closest match to each of several individual demographic factors. For example, you will be compared to other enterprises within your industry, without consideration for other factors.

Your Peer Group Below is the composition of your peer group based on your demographic information. Your peer group is comprised of others in your industry,with similar sized IT groups, number of users supported by the IT group, planned IT spending, gross revenue, and percentage of IT servicesthat are outsourced.

Box Plot (a.k.a. Box and Whisker) Graphs Explained

Box plot graphs are highly informative and simple to interpret.They show on the same graph: • The median of all responses • The range of responses. You should never compare yourself to asimple median or simple average. Knowing where you fall within therange can help you determine how closely your results resemble thebulk of your peers. Box plot elements: • The thin while line – the median value (the value where 50% ofrespondents had a higher result and where 50% of the respondents hada lower result) • The “tails” – shows the range of responses from the 15th percentile(the response where only 15% of metric values were lower) to the 85thpercentile (the response where only 15% of metric values were higher)• The thick orange line – the value of your metricBox plot interpretation:• Inside the “box” – your metric value falls within the middle 50 percentof respondents. You can consider yourself “in-line” with your peers.• On the “tails” – your metric value is either lower or higher than the bulkof your peers, but not unexpected – within range but on the low or highside. Keep this result in mind as you review other metrics since it mightbe an indicator of performance issues.• Outside the range – your metric value is outside, either much lower ormuch higher, what would normally be expected. Consider carefully whyyour value is extreme. This is a strong indicator of potential problems.

Top Level Metric – IT Staff as a Percentage of All Staff

This chart compares the size of your ITorganization, relative to the size of theentire enterprise workforce, to yourcomposite peer group. Generally, if your metric value is in-linewith your peers (inside the “box”) therelative size of your IT organization isreasonable compared to your peers. Ifyou fall on or above the upper tail, yourstaffing level exceeds that of most ofyour peers. You should investigatewhat your organization is doing torequire more staff or whether you areoverstaffed. If you fall on or below thelower tail, your staffing level trails thatof most of your peers. If this is thecase, you should investigate whetheryour organization is highly efficient orwhether you are understaffed.

This table compares your metric value to various highs and lows: the highest median value across all industries, lowest median value across all industries, themedian value of your peer group, the 85th percentile value reported in your industry and the 15th percentile reported in your industry. Please note that yourindustry high and low should show the 85th and 15th percentiles respectively, not the absolute high and lowwhich will almost always be outliers

Your Ratio Highest Industry Median Lowest Industry Median Peer Group Median Your Industry High Your Industry Low2.67% 5.66% 1.47% 2.72% 40% 1.43%

IT Staff as a Percentage of All Staff – Different Perspectives

This chart shows the relative size if theIT staff to all staff and compares thisratio to different peer groups asdefined by a single demographicfactor. You can see, at a glance, how yourrelative staffing level compares to otherorganizations with similar:•Growth in Capital Budget•Growth in Operating Budget•Involvement in Outsourcing•Size based on Revenue•And Industry

This table shows how your staffing ratio compares to others with similar Capital and Operational Budget Growth, Outsourcing Activities, Size, and Industry

You Capital Budget Median Operating Budget Median Outsourcing Median Size Median Industry Median2.67% 2.71% 2.99% 2.80% 2.62% 3.55%

Top Level Metric - Gross Revenue per IT Employee

This chart compares the size of your ITorganization relative to the total grossrevenue of the enterprise. Generally, if your metric value is in-linewith your peers (inside the “box”) therelative size of your IT organization isreasonable compared to your peers. Ifyour metric value falls on or above theupper tail, your IT organization issmaller than most of your peers.Consider whether your organization ishighly efficient or whether you might beunderstaffed. If your metric value fallson or below the lower tail, you ITorganization is larger than most of yourpeers. Consider whether yourorganization performs extraordinaryduties or whether you might beoverstaffed.

This table compares your metric value to various highs and lows: the highest median value across all industries, lowest median value across all industries, themedian value of your peer group, the 85th percentile value reported in your industry and the 15th percentile reported in your industry.

Your Highest Industry Median Lowest Industry Median Peer Group Median Your Industry High Your Industry Low$5,300,000 $30,639,154 $2,666,667 $5,507,143 $16,012,500 $278,401

Gross Revenue per IT Employee – Different Perspectives

This chart compares the size of your ITorganization relative to the total grossrevenue of the enterprise to differentpeer groups defined by singledemographic factors.You can see, at a glance, how yourrelative staffing level compares to otherorganizations with similar: •Growth in Capital Budget•Growth in Operating Budget•Involvement in Outsourcing•Size based on Revenue•And Industry

This table shows how your staffing ratio compares to others with similar Capital and Operational Budget Growth, Outsourcing Activities, Size, and Industry

You Capital Budget Median Operating Budget Median Outsourcing Median Size Median Industry Median$5,300,000 $7,000,000 $7,500,000 $6,400,000 $7,222,222 $5,000,000

Second Level Metrics – IT Managers as a Percentage of all IT Staff

This chart compares the number ofmanagers in your IT organizationrelative to number of IT staff to yourcomposite peer group, to enterprises ofsimilar size and to those in yourindustry. • A metric value on or beyond the righttail, suggests that you have moremanagers than expected. Considerwhether your managers are doingmuch more than just managing, orconsider whether you have too manymanagers for your organization.Ametric value on or beyond the left tail,suggests that you have fewermanagers than expected. Considerwhether other staff are taking onmanagement duties, or considerwhether you have too few managersfor your organization.

Second Level Metrics – Staff Growth

This chart compares how changes inyour IT staffing levels compare withchanges experienced by yourcomposite peer group, withinenterprises of similar size and by thosein the same industry. • A metric value on or beyond the righttail, suggests that you haveexperienced greater growth than mostof your peers. Consider the rationalefor this growth and whether, givencompany performance and economicconditions, this level of growth can bejustified. A metric value on or beyondthe left tail, suggests that you haveexperienced slower growth or greatercontraction than most of yourpeers.Consider the drivers motivatingyour slow growth or contraction andwhether this pace is appropriate givencompany performance and strategicobjectives.

Second Level Metrics – Staff Attrition

This chart compares you IT staffattrition to that experienced by yourcomposite peer group, withinenterprises of similar size and thesame industry. • A metric value on or beyond the righttail, suggests that you haveexperienced higher attrition than mostof your peers. Consider motivatingfactors driving staff to leave yourorganization and what retentionprograms might be warranted. A metricvalue on or beyond the left tail,suggests that you have experiencedlower attrition than most of your peers.Consider whether you are retainingpoor performers and what steps shouldbe taken to keep your organizationrenewing itself.

Second Level Metrics – Staff Mix by Employee Type

This chart compares your IT staffingmix in terms of full-time, part-time andcontract staff with that of yourcomposite peer group, withinenterprises of similar size and thesame industry. • Maintaining a mix of contract, full-timeand part-time staff permits organizationflexibility in assigning duties, acquiringpoint-specific expertise and meetingtemporary periods of peak demand. Ifyour mix differs significantly from yourpeers, consider whether yourorganization has sufficient flexibility toaffordably meet current and anticipatedworkload, or whether your organizationmay be incurring excessive costs withtoo many contractors.

Detailed Staffing Metrics – Demographics and IT Staff Organization

Detailed Staffing Metrics – Staff Experience and Personal Experience

Detailed Staffing Metrics – Staff Activity