CIO —
All the discussion we’ve had lately about averages got me thinking about the ways in which your company is not average. Here are some suggestions, courtesy of Forrester, Gartner and Aberdeen Group:
1. Technology’s role in products and services--High concentration of IT in products (insurance and financial products, for example) means higher spending
2. Business volatility--If you are absorbing an acquisition, your spending will be higher than normal
3. Organizational structure--Centralized costs less than decentralized
4. Competitive pressure--If your company focuses heavily on using IT to add new business capabilities, your spending will be higher
5. Geographic scope--Local is less expensive than global
6. Size--Smaller companies tend to spend more on IT as a percent of revenue than larger companies in their industry, while big companies tend to spend more per employee because they tend to be more complex
7. Complexity--High-complexity IT infrastructures (many different systems, many older systems) cost up to 50 percent more than low complexity (standardized infrastructure, few applications)
8. Appetite for risk--Aggressive adopters of new technology may outspend a mainstream adopter by 30 percent and a risk-averse company by 50 percent
9. Service levels--High service levels (mission-critical IT) cost more than low services levels
10. Blip spending--Upgrading a system or refreshing all the old PCs across the company can temporarily bump spending level up beyond what they would normally be
11. Rogue spending--Companies where IT is tightly controlled by a central IT department will have higher spending levels than a company where IT is highly decentralized and functions have the power to buy their own IT--usually because the decentralized companies cannot fully or accurately account for their total IT spend
12. Revenue per employee--Companies with high revenues per employee will tend to have more knowledge workers who use IT intensively, thus pushing up IT spending levels per employee
Do you have any you’d add to this list?
