Monday, August 01, 2011

Measuring IT Performance & Spending

Industry analysts never seem to tire of debating factors that drive IT spending, it may be their favourite subject. In our experience, IT spending is driven primarily by 4 factors:
  • Your choice of products and technologies
  • Your business processes
  • How your organisation is structured
  • The way in which you interface with customers
If you are a CIO (or more likely in UK companies, an IT Manager), the chances are that only one of those factors is under your direct control. This is why you feel constant pressure to stay within budget while delivering the levels of service the organisation demands. IT managers are simply not in control of most of what influences the total cost of IT. As a result of this, IT headcount comes under constant scrutiny. Unable to alter the organisation's basic processes, structure, or the way it touches customers, the IT headcount figure receives a great deal of attention and more often than not, downward pressure from senior management.

It is for this reason that measuring the IT department's performance through a set of ratios and comparables has become the industry analysts 2nd most popular topic after debating spending drivers.

So how should we measure the performance of IT in 2011?

We already know that about 70% of all IT budgets are contractually committed to software or hardware maintenance, telecommunications, to managing what is already running. After taking out another 15-20% for migration/end-of-life projects, this leaves about 10% for innovation. With such a large part of the budget locked-out from the effects of short-term management changes, it does not make sense to use IT budget number itself as part of a performance metric. Instead we can use something better...

To find out what, download our guide to measuring your IT organisation's performance in 2011.

At 360is each of our consultants have over 15 years experience helping our clients make product and technology decisions. As vendor-neutral advisors we can help you get the maximum value from your IT budget through fixed-price engagements and periodic intervention in your mission critical projects. We are able to assist in budget justification and vendor negotiations and act in the sole interest of our client. If you have a project that would benefit from our contribution then please get in touch.

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