- Major Studies
- Market Assessments
Benchmarking is a time-tested way for IT executives to justify their IT budgets and focus on continuous improvement. Whether it is to compare their IT spending levels with industry peers, defend current spending levels, justify new spending requests, or identify opportunities for cost improvement, benchmarking is the only way to objectively measure an organization’s IT budget against industry standards.
Before embarking on a benchmarking project, an organization first needs to decide on the overall approach it wants to take in benchmarking. Will it benchmark against published industry metrics or against a small group of hand-picked peer organizations?
There are three basic ways to benchmark an organization’s IT budget ratios, as shown in Figure 1 from our report, Best Practices in Benchmarking IT Budget Ratios. The most common way is to measure the organization’s IT spending levels against published industry metrics, such as those offered by Computer Economics and other research organizations. Alternatively, an organization may solicit a small number of industry peers to take part in a special benchmarking study. Finally, an organization may benchmark itself against itself, either measuring one of its business units against others, or comparing budgetary ratios over time.
Each of these approaches has its advantages and disadvantages.
This Research Byte is a brief overview of our report on this subject, Best Practices for Benchmarking IT Budget 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 (click for pricing).
Interested in a custom benchmark for your organization? Request a free sample of the deliverable from our custom benchmarking service:
Prefer to conduct your own IT spending benchmarking? Consider our published IT spending benchmarks:Download the Executive Summary