There’s no magic IT spend benchmark … let’s stop looking!

by

One of my CIO friends asked me this morning for the best overall benchmarks for IT spend. I told him the only measure I’ve seen consistently is IT spend as a percentage of revenue, which averages around 3% and varies by industry with retail at the low end and financial services at the high end. And I told him I didn’t like it …

He sent along a Gartner report he’d been reviewing with all kinds of potential benchmarks like spend per user device, spend per employee, IT headcount as a percentage of overall headcount, etc. As suspected, it also had the standard IT spend as a percentage of revenue, probably more accurate than my ballpark at 4% and with all the usual breakdowns by industry.

The report was interesting but didn’t change my opinion. I’ve never seen an overall measure I like for benchmarking IT spend to other companies. At the detailed level, benchmarks can be interesting for comparing things like help desk cost per employee or training cost per IT employee but overall benchmarks have too many variables to be fair comparisons. Not only are industries very different, company size and age influence spend as well. Additionally, companies use IT in different ways strategically and should invest based on their strategy.

Theoretically, benchmarks could be useful to back up more internally focused analysis, but I haven’t even found them particularly helpful in that regard. We’ve used benchmarks to try to convince CFOs that they need to invest to stay competitive, and they usually just argue that their company isn’t comparable to their industry or competition. These benchmarks could be used to make a case for cutting spend, but most executives don’t need extra analysis to be convinced of that strategy anyway.

So my vote is to stop looking externally for an easy answer, and instead focus on improving the measures in house based on the company’s strategic objectives.

READ MORE

Shifting Perspectives: 3 Learnings From a 3-Day Training

Shifting Perspectives: 3 Learnings From a 3-Day Training

About a week ago, I completed the second live (virtual) training in the process of becoming a Certified Professional Coach through iPEC. Once again, my mind was blown! It reinforced for me that virtual workshops can, and do, work, and, in a lot of ways, I prefer them...

read more
Finding My Work-Life Balance

Finding My Work-Life Balance

In my previous post, I told the story of how I got back into consulting after becoming a mom. All of the diverse experiences I had during that journey have helped me to find my work-life balance by… Defining Boundaries “Go home,” my first boss said 12 years back —...

read more
How I Got Back to Work After Being a Full-Time Mom

How I Got Back to Work After Being a Full-Time Mom

I Landed My Dream Job Throwback to 2014, I had completed my MBA, landed my dream job as a consultant, and was hoping that my new consulting career would exponentially ramp up my career growth for the next 5 years. This would position me to take on critical decision...

read more
Self-Awareness is Key to Belonging

Self-Awareness is Key to Belonging

In August of this year, as part of our annual company meeting, our team at Thought Ensemble participated in the foundational session of Diversity, Equity, and Inclusion (DEI) training led by Dr. Nika White, IOM, CDE (she/her/hers). One of the most meaningful moments...

read more
Finding Your Organization’s Magic Pixie Dust

Finding Your Organization’s Magic Pixie Dust

It is often said that organizational culture is like a fog — it is all around us; it impacts our ability to see, to move quickly, and to deliver; but we cannot quite put our finger on it. Indeed, some organizations see their culture as a byproduct of operations,...

read more
We’ve Refreshed Our Brand!

We’ve Refreshed Our Brand!

Why have we refreshed our brand, you ask? Well, as we have grown and matured as an organization, we felt that our previous brand elements no longer represented us as well as they could. You see, we founded Thought Ensemble back in 2008 to help companies better compete...

read more
Thought Ensemble’s Purpose — Inspired in 2020

Thought Ensemble’s Purpose — Inspired in 2020

I recently wrote about how company purpose is being tested and inspired by all the events of 2020. This topic is very real for us at Thought Ensemble. We’ve been thinking a lot about what really matters as we’ve navigated the...

read more
How 2020 Is Testing and Inspiring Corporate Purpose

How 2020 Is Testing and Inspiring Corporate Purpose

In August 2019, the Business Roundtable rewrote their statement of corporate purpose. I followed this with significant interest being that I have never forgotten the debates about corporate purpose in business school almost two decades ago. We were taught that the...

read more
Why Purpose-Driven Organizations May Struggle With Change

Why Purpose-Driven Organizations May Struggle With Change

I love working with companies who really want to make a difference, beyond just making money for their shareholders. I mean, making money is fun and all, but it is even more rewarding to join in on a just cause. Plus, as this HBR article explains, companies who have...

read more