Comparing Your IT Shop to Others

Benchmark the right way to gain useful insights.

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Benchmarking the right way for the right reasons gets the right results

Execs naturally want comparisons, and being open to comparisons gives you a baseline for yourself and an understanding of where you might improve the quality and effectiveness of your organization. Benchmarking of practices is a greater enabler for improvement than benchmarking numbers—but you will likely need to do both. To gain the most useful insights, you should:

  • Understand how your context and organization compare to the others. Participate in a multidimensional benchmark, looking at how your enterprise's demand for, use of and attitude toward IT compared to other firms and organizations. This will help you avoid pursuing strategies that don't fit your situation.

  • Pick the most important areas for improvement. A benchmark will show many gaps with best practices, but you must prioritize what areas you'll focus on based on size of gap and importance to organizational success. Consider making these changes part of your strategy and operating plans to provide visibility and accountability.

  • Use comparison data to improve the perception of IT by your business peers. An appropriately structured benchmark—one that is not focused on cost alone—is a chance to show your peers you are running a well-managed operation. It is also a "teaching moment"—when you can educate them about the factors that drive IT costs and the practices that others use to manage these factors.

  • Consider making a lightweight benchmark an annual activity. IT performance improvement must be a continuous focus, not a one-time event. By making a benchmark an annual activity, you instill a management culture based on continuous improvement based on reflection, comparison and adoption of best practices.

Methodology

This report synthesizes the experience of Forrester analysts over hundreds of benchmarking and best-practice assessments. This experience has gone into the methodology behind Forrester's planning and budgeting benchmark and best-practices service.

By Alex Cullen, with Craig Symons, Bobby Cameron, Paul Warren, Laurie Orlov and Bo Belanger

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Copyright © 2007 IDG Communications, Inc.

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