It Key Metrics Data Key Indu 151933

Benchmark Analytics
Publication Date: 18 December 2006 ID Number: G00151933
IT Key Metrics Data: Key Industry Measures: Sample

Measures
Linda Tracy, Jamie K. Guevara, Oliver Harcourt, Eric Stegman
IT Key Metrics Data: Key Industry Measures provide fundamental enterprise-level IT

benchmarks and business productivity ratios. It also contains trending for key enterprise
spending, staffing and business ratios.
This document contains sample IT Key Metrics Data: Key Industry Measures. These
sample measures are from the 2007 edition of the IT Key Metrics Data and serve as
examples of the delivery format and insight provided in the 2008 edition of the IT Key
Metrics Data published benchmark reports.
IT Key Metrics Data allows you to rapidly identify trends in; IT spending & staffing across
22 industry sectors; unit cost and performance measures across critical IT domains; as
well as Information Security investment levels & key Outsource measures by industry &
region. More information on IT Key Metrics Data can be found at
www.gartner.com/itkmd or feel free to contact us at: kmdinfo@gartner.com.
© 2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form
without prior written permission is forbidden. The information contained herein has been obtained from sources believed to
be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although
Gartner's research may discuss legal issues related to the information technology business, Gartner does not provide legal
advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors,
omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein
are subject to change without notice.
TABLE OF CONTENTS
Analysis ............................................................................................................................................. 3
LIST OF FIGURES
Figure 1. Cross Industry: IT Spend as % of Revenue ....................................................................... 3

Figure 2. Cross Industry: IT Spend as % of Operational Expenses.................................................. 4
Figure 3. Cross Industry: IT Spend per Employee ............................................................................ 5
Figure 4. Cross Industry: IT Employees as % of Total Employees ................................................... 6
Figure 5. Cross Industry: Revenue per Employee ............................................................................ 7
Figure 6. Cross Industry: Income per Employee ............................................................................... 8
Figure 7. Cross Industry: Profitability ................................................................................................ 9
Figure 8. Cross Industry: Capital vs. Operational Expenses........................................................... 10
Figure 9. Cross Industry: In-House vs. Contract Employees .......................................................... 11
Figure 10. Cross Industry: IT Spend to Run, Grow, and Transform the Business.......................... 12
Figure 11. Cross Industry: Distribution of Spending on HW, SW, Personnel, Outsourcing, Other. 13
Figure 12. Cross Industry: Distribution of Spending & Staffing by IT Domain ................................ 14
Publication Date: 18 December 2006/ID Number: G00151933 Page 2 of 17

© 2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved.
ANALYSIS
Figure 1. Cross Industry: IT Spend as % of Revenue
35%
30%
25%
20%
15%
10%
5% 4.05%
0%
= Range = Average = Middle Quartiles
Company Revenue Size ($Millions)

Average Under $50 $50 - $250 $250 - $500 $500 - $1B $1B - $10B $10B+
4.05% 5.51% 4.66% 4.52% 3.72% 3.55% 3.16%
Global 2000 / S&P Range 3.49%
Fortune 500 Range 3.43%
Dow Range 3.16%
Source: Gartner IT Key Metrics Data 2007
IT spending as a percent of revenue is helpful in understanding the relative level of IT investment.

Figure 2. Cross Industry: IT Spend as % of Operational Expenses
40%
35%
30%
25%
20%
15%
10%
5% 5.52%
0%

5.52% 6.67% 6.02% 6.45% 5.49% 4.72% 5.12%
Dow Range 5.12%
IT spending as a percentage of operational expenses provides a view of the role of IT in total

business spending.

Figure 3. Cross Industry: IT Spend per Employee
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$12,032
$-

$ 12,032 $ 8,057 $ 10,562 $ 14,073 $ 10,968 $ 12,836 $ 15,274
Global 2000 / S&P Range $13,009
Fortune 500 Range $13,526
Dow Range $ 15,274
IT spending per employee is often used to determine the amount of IT support the average
company employee receives.

Figure 4. Cross Industry: IT Employees as % of Total Employees
45%
40%
35%
30%
25%
20%
15%
10%
6.43%
5%
0%

6.43% 7.36% 8.16% 6.23% 6.70% 5.95% 4.01%
Dow Range 4.01%
IT employees as % of total employees is an additional measure of IT support and IT intensity

from a human capital perspective.

Figure 5. Cross Industry: Revenue per Employee
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$392,390
$-

$ 392,390 $ 185,843 $ 278,884 $ 300,407 $ 354,028 $ 471,004 $ 639,907
Dow Range $ 639,907
Revenue per employee can help determine employee productivity and is also typically influenced
by company business model (e.g. highly employee intensive vs. highly automated).

Figure 6. Cross Industry: Income per Employee
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000 $61,719
$-
$(100,000)

$ 61,719 $ 37,736 $ 41,211 $ 53,950 $ 37,512 $ 69,378 $ 127,556
Dow Range $ 127,556
Income per employee is often employed as a measure of cost efficiency at an enterprise level.

Figure 7. Cross Industry: Profitability
80%
70%
60%
50%
40%
30%
20% 13.07%
10%
0%
-10%
-20%
-30%

13.07% 12.02% 11.36% 10.99% 12.79% 12.15% 20.17%
Dow Range 20.17%
Profitability (operating profit) is a measure of cost efficiency and can also help outline a
company’s position relative to peers and is often related to investment patterns.

Figure 8. Cross Industry: Capital vs. Operational Expenses
Operational Capital
69% 31%
0% 20% 40% 60% 80% 100%
IT capital expenses vs. operational expenses helps to portray the investment profile for an
organization in a given year.

Figure 9. Cross Industry: In-House vs. Contract Employees
In-House Contractors
80% 20%
0% 20% 40% 60% 80% 100%
In-house vs. contract employee can help provide a view of the IT staffing strategy.

Figure 10. Cross Industry: IT Spend to Run, Grow, and Transform the Business
Run Grow Transform
65% 20% 15%
0% 20% 40% 60% 80% 100%
The distribution of IT spending to “run”, “grow”, and “transform the business” provides a view of
the investment profile in business terms. In some industries, it is not uncommon to see high “run”
focus – typically because organizations in the industry are not planning strong changes in
business model or high organic growth - so this often times translates into a more “cost center”
role of IT in the industry.

Figure 11. Cross Industry: Distribution of Spending on HW, SW, Personnel, Outsourcing,
Other
Hardware
Software
Personnel Salaries & Benefits
Outsourcing
Other
18% 19% 32% 22% 9%
0% 20% 40% 60% 80% 100%
Distribution of spending between hardware, software, personnel, and outsourcing helps illustrate
the level of internal vs. external spend, and can provide some insight into fixed vs. variable costs.

Figure 12. Cross Industry: Distribution of Spending & Staffing by IT Domain
Staffing
Distribution
Spending
Distribution
0% 20% 40% 60% 80% 100%
Spending Distribution Staffing Distribution

Finance & Administration 2% 4%
IT Management 5% 7%
Applications Support 16% 18%
Application Development 20% 23%
Help Desk 5% 8%
Voice Network 7% 4%
Data Network 10% 6%
Desktop & Peripherals 13% 11%
Data Center 22% 19%
The distribution of spending and staffing by technology domain provides a view of key IT resource
consumption. This distribution represents an “expense view” of IT spend which includes current
year operational expense as well as current year lease, maintenance, depreciation & amortization
expense.

Notes:
Cross Industry:
This is a database view across all organizations and industry sectors identified in 2007 edition of
IT Key Metrics Data.
Employee, income & revenue data is based on the most recently completed fiscal year.
For additional information, please refer to the Gartner IT Key Metrics Data homepage at
www.gartner.com/itkmd .
Glossary:
Company Employees:
Indicate the count of employees (i.e., head count excluding contractors or consultants) regardless
of whether these employees are frequent users of the technology supported by the IS
organization.
Contract Full Time Equivalents:
This includes the headcount for contract labor, which is supplemental to your staff and
“operationally” managed by in-house staff regardless of whether these employees are frequent
users of the technology supported by the IS organization.
Contract IT Full Time Equivalents:
Total number of contract full time equivalents, which is supplemental to your staff and
“operationally” managed by in-house staff. This includes all full time, part time, and temporary
FTEs supporting applications (development and support) as well as infrastructure: data center,
client (desktop) and peripherals, help desk, voice network (WAV: VNS, PTN, cellular & VPT:
PBX, CTX, VOIP, VOIP CTX), data network (WAN, MAN, LAN, RAS, IAS), and Finance,
Administration and Management.
Insourced IT Full Time Equivalents:
Total number of insourced (in-house) full time equivalents who are employed by the IT
organization (excluding contract & consultants). This includes all insourced full time, part time,
and temporary FTEs supporting applications (development and support) as well as infrastructure:
data center, client (desktop) and peripherals, help desk, voice network (WAV: VNS, PTN, cellular
& VPT: PBX, CTX, VOIP, VOIP CTX), data network (WAN, MAN, LAN, RAS, IAS), and Finance,
Administration and Management.
IT Budget/Spend:
IT Budget/Spend should account for the organization’s entire budget which includes capital and
operational IT budget/spend. This includes all hardware, software, personnel, training, disaster
recovery, facilities, transmission, and any other costs associated with supporting the IT
environment which includes applications (development and support) as well as infrastructure:
data center, client (desktop) & peripherals, help desk, voice network (WAV: VNS,PTN, cellular &
VPT: PBX, CTX, VOIP, VOIP CTX), data network (WAD, MAD, LAD, RAS, & IAS), and finance,
administration and management.
IT Budget/Spend on Capital (in thousands):

Capital Expenses: Any expenses made in a given year that have been capitalized (accounted for
as assets).
IT Budget/Spend on Ongoing Operations (in thousands):
Operational expenses: day to day operations that have not been capitalized.
Operational Expense (in millions):
Enterprise expense equals the expense associated with the business units supported by the IS
organization.
Outsourcing (Staff & Services):
Outsourced is defined as subcontracting work to an external source (e.g. microfiche, print,
maintenance, procurement, systems management, equipment, etc.).
Revenue (in millions):
The enterprise revenue associated with the business units supported by the IS organization
(Banks: use net fee and interest income; Insurance: use gross premium and other income;
Government and non-profit: use enterprise operating budget).
Strategic Spending Categories:
• Run the Business: This is an indicator of how much of the IT resource is consumed
and focused on the continuing operation of the business. It includes all non-discretionary
expense as part of the Run the Business Cost.
• Grow the Business: This is an indicator of how much of the IT resource is consumed
and focused on developing and enhancing IT systems in support of business growth
(typically organic growth). Discretionary investments are included in the Grow the
Business Cost.
• Transform the Business: This is an indicator of how much of the IT resource is

consumed and focused on implementing technology systems that enable the enterprise
to enact new business models. This is very much a ""venture"" category and would be
represented by activities such as the e-investments in the late 1990's.

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Benchmark Analytics

Publication Date: 18 December 2006 ID Number: G00151933

IT Key Metrics Data: Key Industry Measures: Sample

IT Key Metrics Data: Key Industry Measures provide fundamental enterprise-level IT

Figure 1. Cross Industry: IT Spend as % of Revenue ....................................................................... 3

Publication Date: 18 December 2006/ID Number: G00151933 Page 2 of 17

Figure 1. Cross Industry: IT Spend as % of Revenue

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

IT spending as a percent of revenue is helpful in understanding the relative level of IT investment.

Publication Date: 18 December 2006/ID Number: G00151933 Page 3 of 17

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

IT spending as a percentage of operational expenses provides a view of the role of IT in total

Publication Date: 18 December 2006/ID Number: G00151933 Page 4 of 17

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

Publication Date: 18 December 2006/ID Number: G00151933 Page 5 of 17

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

IT employees as % of total employees is an additional measure of IT support and IT intensity

Publication Date: 18 December 2006/ID Number: G00151933 Page 6 of 17

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

Publication Date: 18 December 2006/ID Number: G00151933 Page 7 of 17

= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

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= Range = Average = Middle Quartiles

Company Revenue Size ($Millions)

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0% 20% 40% 60% 80% 100%

Source: Gartner IT Key Metrics Data 2007

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0% 20% 40% 60% 80% 100%

Source: Gartner IT Key Metrics Data 2007

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Run Grow Transform

65% 20% 15%

0% 20% 40% 60% 80% 100%

Source: Gartner IT Key Metrics Data 2007

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18% 19% 32% 22% 9%

0% 20% 40% 60% 80% 100%

Source: Gartner IT Key Metrics Data 2007

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0% 20% 40% 60% 80% 100%

Spending Distribution Staffing Distribution

Source: Gartner IT Key Metrics Data 2007

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• Transform the Business: This is an indicator of how much of the IT resource is

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Latin America Headquarters

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