The world is a volatile place at the moment. As a senior IT leader it’s a constant challenge to keep ahead of competitors with new technology transformation, at the same time as keeping the ship running as smoothly as possible.
It’s therefore essential that your IT spend is fully optimised and you’re sure that you’re paying the right price for your outsourced services and are investing in the right areas.
This is where benchmarking comes in. It’s not enough to take a single metric and call it a benchmark any more, because IT is a multi-layered world consisting of diverse technologies linked together, overlayed with a multitude of service levels and user support functions. To distil this into a single metric – IT spend as a percentage of revenue used to be a common one – is a bit like going on a diet and only taking your height as a measurement.
Complexity is a major driver of IT cost, and the more complex a given IT environment is, the more expensive it is to run and maintain. However, it’s also inherently necessary to support a modern business’ needs.
How do you benchmark a complex IT environment?
ImprovIT has been benchmarking diverse organisations for over 15 years. We start by deconstructing the IT landscape into its constituent components. The entire technology landscape is segmented into a number of discrete technology areas, and for each area we have a codified model that defines the precise scope of that area in terms of the hardware and software elements, the roles and functions, and the services we expect to see within that area.
During the benchmark assessment we calculate a complexity index for each technology area. So each area is compared to a carefully selected peer group of other samples. By then combining these peer groups together, we can build a composite model that exactly matches the IT function being analysed.
This approach goes far beyond the “one metric” benchmarking approach and provides a highly relevant and insightful set of findings that can then be used to optimise the IT spend.
How do I convince the board to invest money in benchmarking?
In our experience, boards tend to be a lot more open to optimisation discussions than big budget increases. Far too often, traditional benchmarks will report that the company has underinvested in IT by a given percentage, and the solution will be to throw more money at the problem. In reality, by providing a menu of potential solutions which focus on optimising departments and processes, companies could be getting more out of what they have before they begin looking at revising budgets – many of which are already under significant strain. And this is a great message for the board.
Regular, updated benchmarking is now possible
Annual benchmarking ensures that you keep on top of costs and can align your IT strategy with your business strategy, so you stay on course to hit your business goals. What we’re really excited to share with you, is that we can now also offer near real time benchmarking. We call this Benchmarking as a Service (BaaS).
It provides our clients with the ability to update benchmarking data on a regular basis, receiving feedback through BI dashboards that will allow them to make small course adjustments throughout the year, and not only on an annual (retrospective) basis. We believe this is the future of benchmarking.
Benchmarking gives you an opportunity to deliver real, measurable improvements. This not only ensures a more competitive and profitable company, but also showcases IT’s value in an increasingly high-risk and volatile global economy.