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IT Management: Does It Scale?
December, 2006

Every IT organization requires management, but how many managers are really necessary? Having too many managers creates an unnecessary bureaucracy with too many layers. In such organizations, salaries are disproportionately devoted to those managing instead of doing, and there may be more time spent meeting and talking about the work than actually doing it. Too few managers, on the other hand, can lead to loss of productivity among technical staff, as much of their time is taken up with planning, administration, and coordination activities that would normally be handled by managers.

This article is an executive summary of our full report, IT Manager Staffing Ratios.

Determining the appropriate balance between IT managers and staff members, therefore, is a key decision of IT organizational design. To make this decision, it is helpful to understand what drives the ratio of IT managers to technical staff. Does the number of users influence the number of IT managers required? What about the number of desktop and portable PCs? How scalable is management? As organizations grow in size, are more managers required at every level?

To answer these questions, Computer Economics conducted a survey of nearly 200 CIOs and senior IT managers. Our goal was to establish benchmarks for IT manager staffing across multiple industry sectors and company sizes. These benchmarks offer insights into the management process and provide norms across a wide spectrum of practices within IT organizations.

Ratios Vary with Management Level
In our study, respondents were asked to provide information regarding the number of managers in the following categories:

  • Senior executive - In all but the largest IT organizations, only one person is at this top level, such as a CIO or VP IT.
     
  • Middle managers - These positions, reporting to the senior IT executive, typically involve direct supervision of other managers.
     
  • Line managers - These are first-level IT managers responsible for directly supervising technical staff. However, first-level managers who are primarily "doers" (managers in name only) were classified as technical staff members rather than managers in this study.

Classical management philosophy concerning "span of control" suggests that managers should limit themselves to no more than seven direct reports to ensure that their efforts are not spread too thinly. Study results, presented in the full report, indicate that this trend is common within IT centers. This outcome, however, is in conflict with the desirability of a flexible, horizontal organizational structure rather than an unwieldy hierarchy. Further discussion of this point follows the presentation of the survey results.

The full version of this report provides staffing ratios for IT manager positions (executive, mid-level, and line managers) as a percent of the total IT headcount. IT manager staff ratio benchmarks are also provided by number of desktops (PCs) and number of users, broken out for small, medium, and large companies. These metrics show that IT management is not a highly scaleable function.

Computer Economics Viewpoint
The outcome of this study indicates that there is consistency in terms of manager to staff ratios, number of users, and number of PCs in almost all companies regardless of size. Not all organizations use a three-level hierarchy of IT management, and the demarcation between middle and line managers is often indistinct. Additionally, in some organizations, line managers are classified as members of the technical staff rather than managers. For these reasons, the composite ratios of the three management categories to staff, users, and PCs are the simplest to use as they eliminate ambiguities involving the definition of management categories.

IT management does not scale with increasing size of the IT organization. Managers in larger organizations are only slightly more productive than those in smaller ones, as measured by the benchmarks in this study. Unfortunately, there does not appear to be a way to automate management.

Therefore, if an organization wishes to reduce the number of IT managers, the ideal strategy would be find ways to reduce IT staff headcount without sacrificing service levels. Strategies to optimize overall IT headcount include investment in productivity tools, such as those for data center automation and server administration, and IT process improvement initiatives such as implementation of the IT Infrastructure Library (ITIL) or Six Sigma. These are not short-term solutions and they require a sustained program to achieve excellence in the IT organization and improve the effectiveness of IT management.

December 2006


This executive summary is a brief overview of our report on this subject, IT Manager Staffing Ratios. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website at http://www.computereconomics.com/article.cfm?id=1186 (click for pricing).

Do you also need staffing ratios for other IT job functions? Consider this collection of all of our staffing ratio reports, which bundles them all into a single report at a significant discount: IT Staffing Ratios--Special Report Bundle


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