An important aspect of running your IT shop in a cost-effective manner aligned with business objectives is to measure efficiency ratios or metrics.

This, as everything in business, keeps you and your team in line with your plan and most importantly, gives you perspective, or in other words tells you how you compare to the herd, a general one or a more industry-specific one. This seems funny but it is extremely important in knowing where to focus your improvement efforts and where not to waste time.

What to measure is a very good question and the answer varies from business to business, but I will try and share our experience on what matters and what is most commonly used.

I will start with general Enterprise IT efficiency ratios, and in future posts will expand to specific areas within IT.

IT Spend as a % of Total Revenues
IT Spend as a % of Operating Expenses
IT Spend per Corporate FTE
IT FTE count/Corporate FTE count
IT Contractor Usage (% FTE In-house vs. Contractor)
IT Capital spend as a % of Total IT spend
IT Operation spend as a % of Total IT spend

As to what are the specific industry values one should expect for each one of these, that varies from industry to industry and probably requires a longer conversation than this post.

Hope this helps.