IT Spending and Staffing Benchmarks—IT Budget and Cost Key Metrics by Industry and Company Size
Preparing a benchmark for IT spending or IT employee staffing levels can be a difficult exercise for any business. Our IT Spending and Staffing Benchmarks study makes the job easier by providing an IT spending framework with hundreds of ratios, statistics, and other IT cost metrics for strategic IT budget analytics. IT spending as a percent of revenue and dozens of other IT budget ratios are provided by industry and company size.
In this annual report, we provide IT budgetary benchmarks and IT staffing metrics by industry sector and organizational size for private and public companies and for governmental organizations, based on our annual, in-depth survey of over 210 information technology executives.
Read a detailed description or access all chapters on the Avasant website.
FULL STUDY DESCRIPTION
INTENDED AUDIENCE
For CIOs and consulting firms, this study of over 36 chapters provides key metrics and unbiased data for you to benchmark an organization’s total IT spending and staffing levels. This study will allow you to achieve the following outcomes:
- Benchmark your IT operational spending levels. Compare them with those of organizations of similar size and industry sector. Over 36 specific IT cost management ratios and other IT support metrics are provided, such as IT budget as a percent of revenue and IT budget per employee/user, allowing IT executives to highlight opportunities to reduce IT costs, optimize IT expenses, and improve the efficiency, effectiveness, and governance of the IT organization.
- Measure your IT capital budget spend levels. Nearly 20 specific IT capital budget metrics are provided to help stakeholders monitor IT investment levels relative to competitors.
- Manage your IT staffing levels. Over 30 IT head count ratios are provided for benchmarking IT staff counts, measuring IT worker productivity, and achieving efficiency within the IT department.
- Evaluate your IT key performance indicators (KPIs). Compare your IT intensity and infrastructure metrics with your peers, using measures such as percentage of the IT budget spending for running, growing, and transforming the business, custom/commercial software mix, users per network site and per printer, PCs per user, percentage of users with smartphones, data center OS mix, virtualization levels, outsourcing and managed services spending levels, use of cloud services, and other KPIs – all important factors in budgeting for IT.
For providers of IT products and services, this study provides valuable insights into the current IT budgeting priorities of corporate buyers and changes in levels of IT operational and capital spending. This study provides objective data based on our in-depth survey of IT decision-makers. As such, it can be a valuable source of IT spending statistics to validate assumptions underlying IT solution provider business strategy, capabilities and competitive analysis, pricing strategies, and sales processes.
INDUSTRY COVERAGE
Our current study provides chapters for over 25 industry sectors, including financial services, manufacturing, high-tech, retail, wholesale distribution, energy and utilities, healthcare, professional and technical services, media and information services, aerospace and defense, transportation, construction/trade services, government, and nonprofit. Individual chapters for even more narrow industry subsectors are also provided, including various types of commercial and public sector organizations.
KEY METRICS
This section lists all the key metrics provided in the full report. All key metrics listed appear in Chapter 2 for the composite sample and in Chapters 3A, 3B, and 3C for small, midsize, and large organizations.
All key metrics are also provided in our industry sector and subsector chapters (Chapters 4–38), except those marked with an asterisk (*).
Demographics
In section 1, we describe the key characteristics of the sample to establish a basis for comparison with other IT organizations. These key metrics are as follows:
- Organization size demographics, including revenue, employees, revenue per employee, and revenue per user
- IT spending demographics, including total IT spending, IT capital spending, and IT outsourcing budget
- IT infrastructure demographics, including number of data centers, network sites, and business applications
- Key metrics of IT intensity, including ratio of users to employees, PCs per user, percentage of users with tablets, percentage of users with smartphones, users per network site, and percentage of application functionality from custom systems
Spending by Type
In section 2, we provide IT spending benchmarks by type of spending. These key metrics not only provide additional demographic information but also identify IT trends. They include:
- Percentage of IT spending devoted to ongoing support
- Percentage of IT budget spending for running, growing, and transforming the business
- Outsourcing as percentage of IT budget
- Percentage of IT spending outside IT budget
- Cloud/subscription software as a percentage of application portfolio (*)
Budgeting Priorities
In section 3, we examine key budget priorities for IT organizations. These key metrics include:
- Plans for IT outsourcing, showing the percentage of companies planning to increase, decrease, and maintain spending at about the same level (*)
- Spending priorities by IT initiative, showing the net percentage of organizations planning to increase spending on business process automation, cloud applications, cloud infrastructure, IT shared services, data analytics/, business intelligence, disaster recovery/business continuity, legacy systems modernization, systems/data integration, data center automation, and digital transformation
- Spending priorities by budget area, showing the net percentage of organizations planning to increase spending on information security/privacy, IT personnel, business applications, data center, networking, and end-user technology (*)
- The importance of lowering costs vs. improving service levels in the coming year (*)
Total IT Spending Metrics
Section 4 presents key metrics for IT spending, which includes current-year IT operational and capital spending, but excludes depreciation. These key metrics include:
- Total IT spending as a percentage of revenue
- Total IT spending per user
- Total IT spending per PC
- Budget categories as average percentage of total IT spending, including spending on personnel, business applications, data center hardware/software, energy/utilities, IT facilities/floor space, cloud infrastructure, network infrastructure, IT security, voice/data carrier expenses, PCs/end-user devices, printers/printing, and other expenses
IT Operational Spending Metrics
Section 5 presents key metrics for IT operational spending. These key metrics are as follows:
- Percentage of organizations decreasing, maintaining, or increasing IT operational spending year over year (*)
- IT operational budget percentage change from previous year (*)
- Adequacy of current IT operational budget to support the business (*)
- IT operational spending as a percentage of revenue
- IT operational spending per user
- IT operational spending per PC
- Percentage of IT operational budget charged back to business units
- Budget categories as average percentage of IT operational spending, including spending on personnel, business applications, data center hardware/software, energy/utilities, IT facilities/floor space, cloud infrastructure, network infrastructure, IT security, voice/data carrier fees, PCs/end-user devices, printers/printing, and other expenses
- Personnel as a percentage of IT operational spending at the 25th percentile, median, and 75th percentile
- Depreciation as a percentage of IT operational budget
Spending Outside the IT Budget
Section 6 provides an analysis of spending that occurs outside of the IT budget and a discussion on how we account for non-IT spending that sometimes appears in the IT budget.
IT Operational Spending per Tower
Section 7 provides an analysis on IT operational spending per tower. These towers are aligned with the Technology Business Management (TBM) taxonomy. Metrics include the percentage of IT operational spending in the IT management tower, business applications tower, data center tower, network tower, end-user tower, security and compliance tower, and delivery tower.
Capital Spending Metrics
Section 8 provides an analysis of IT capital spening, including:
- Percentage of organizations decreasing, maintaining, or increasing IT capital spending (*)
- IT capital budget change from prior year (*)
- IT capital budget as a percentage of IT budget
- Budget categories as average percentage of IT capital spending, including spending on personnel, business applications, data center hardware/software, energy/utilities, IT facilities/floor space, cloud infrastructure, network infrastructure, IT security, voice/data carrier fees, PCs/end-user devices, printers/printing, and other expenses
IT Staffing Metrics
In section 9, we provide key metrics and trend data on IT staffing, including:
- Users per IT staff member
- Percentage of organizations increasing, maintaining, and decreasing IT staff levels from previous year (*)
- IT staff headcount change from previous year (*)
- IT staff turnover
- Annual training allocation per IT employee
- Contingency workers as percentage of IT staff
- IT staff functions as average percentage of IT staff, including IT managers, IT finance/vendor management/procurement, project management, clerical/administrative support, application developers, business analysts, data management, quality assurance/testing, DevOps engineers, database administration, server support, network support, communications support, web/e-commerce, IT security, help desk (service desk), desktop support, documentation/training/process and standards, and other functions
Job Function Metrics
In section 10, we provide key benchmarks for seven job functions:
- IT managers as a percentage of IT staff (*)
- OS instances per server support staff member (*)
- Network devices per network support staff member (*)
- Applications per application developer (*)
- PCs per desktop support staff member (*)
- Users per help desk staff member (*)
- Help desk tickets per end-user support staff member
Service Area Spending Metrics
Section 11 shows IT spending benchmarks by service area as a percentage of total IT spending. The service areas are IT management, business applications, data center, network, end-user computing, and security and compliance.
Business Application Metrics
Section 12 provides business application metrics, including:
- Business application spending as percentage of IT operational spending
- Business application spending per user
Data Center Metrics
Section 13 covers these data center spending and infrastructure metrics:
- Processing workload by operating system, including IBM mainframe, Unix, Linux, IBM i (OS/400), Windows Server, and other
- Percentage of processing workloads by location: on-premises/data center, managed services providers, and public cloud
- Consolidated data center spending per user
- Consolidated data center spending per physical server (*)
- Data center hardware/software spending as a percentage of IT spending
- Data center hardware/software spending per user
- Energy/utilities as a percentage of IT spending (*)
- Energy/utilities spending per user
- Energy/utilities spending per physical server (*)
- Cloud infrastructure services as a percentage of data center spending (*)
- IT facilities/floor space as a percentage of IT spending (*)
- IT facilities/floor space spending per user (*)
- OS instances per physical server (*)
- Users per physical server (*)
Network Metrics
Section 14 covers the following network metrics:
- Consolidated network spending per user
- Network infrastructure as a percentage of IT spending
- Network infrastructure spending per user
- Network spending per network site
- IT security as a percentage of IT spending (*)
- IT security spending per user (*)
- Data/voice carrier spending as a percentage of IT spending (*)
- Data/voice carrier spending per user (*)
End-User Computing Metrics
Section 15 covers the following network computing metrics:
- Consolidated end-user technology spending per user
- PCs/end-user devices as a percentage of IT spending
- PCs/end-user device spending per user
- Printer/printing as a percentage of IT spending (*)
- Printer/printing spending per user (*)
- Users per printer (*)
As noted above, in each chapter, the section on total IT spending and the section on IT operational budgets include a detailed analysis of IT budget line items as a percentage of the total. Line items include IT personnel, business applications, data center hardware/software, energy/utilities, IT facilities/floor space, cloud infrastructure, network infrastructure, IT security, voice/data carrier expenses, PCs/end-user devices, printers/printing, and other.
