The Productivity Gap Between Mid-Market and Large IT Shops
According to an Enterprise Management Associates analyst, big-company IT departments are more efficient and effective than smaller ones.
CIO — It's not enough that mid-market IT shops have to feel slightly envious of big-company IT departments and their access to seemingly unlimited resources, tools and staffers.
Now, says Hank Marquis, director of IT service management consulting at Enterprise Management Associates (EMA), an analysis of recent data trends show that IT departments in Fortune 1000 enterprises actually are more productive and effective service providers than mid-market counterparts—and it has nothing to do with the amount of staffers or money spent.
"The staff-versus-budget argument is based on a false assumption—it improperly assumes that resources committed to IT are used efficiently and effectively. However, in the majority of IT organizations, they are not," writes Marquis in a January 2008 advisory report "Are IT Budgets Too Big?"
So how did Marquis get to this conclusion? First, he states that mid-market IT shops are in trouble. "If the average mid-market IT organization were an independent business, it would have gone out of business long ago," Marquis writes.
A small sampling of data points that Marquis cites (gathered from EMA's own research and from organizations such as Gartner and The Standish Group) sets off some alarms. To wit: Ninety percent of mid-market IT organizations use manual processes. Seven out of 10 calls for IT support are a direct result of incorrect operating procedures, meaning self-inflicted by the IT staff. Eight out of 10 IT system outages are caused by a failed change—meaning, an IT staffer "didn't take the time to consider the ramifications of making a change to the infrastructure," Marquis notes. And as much as 80 percent of the actual IT department is replicated by "shadow IT" workers in the business because IT is too busy to service their customers effectively.
To top it off, Marquis says that research from EMA and The Standish Group show that approximately 70 percent of mid-market IT projects fail.
While conventional wisdom would say that large companies' IT shops are more effective because their company's have deeper pockets, Marquis states that the logic is incorrect. "The common response from [mid-market] IT management to business management is the need for more staff," he writes.
Marquis supports his argument by comparing the "user-to-IT worker" ratio in midsize and large companies. "Larger companies of the Fortune 1000 support almost three times—2.9 times, to be precise—as many users per IT staff member than mid-market companies," he writes. The Fortune 1000 user-to-IT-worker ratio is 512 users for every one IT worker; in the mid-market, the ratio is 175-to-1. This, Marquis writes, makes "mid-market IT organizations only about one-third as effective as their larger Fortune 1000 cousins."
