The best corporate IT departments are successfully completing far more
projects, while spending less money and employing fewer workers,
according to a new study.
This is the information coming out of a new report from The Hackett
Group, a business advisory firm that benchmarked 200 companies over the
last two years. The report finds that ‘world-class’ IT organizations
spend 18 percent less than median companies and run with 36 percent less
Beth Hayes, an IT practice leader with the Atlanta-based Hackett Group,
says companies with 10,000 end users generally save $18.5 million a year
compared to companies with median-performing IT departments. She
calculates that savings based on numbers that show that great IT shops
spend $1,850 less per end user.
And none of this success is based on the size of the company.
”Size doesn’t matter when you’re talking about a world-class IT
organization,” says Hayes. ”Our data shows that the best practices
almost universally apply regardless of the size of the organization. In
many cases, large companies are spending too much or they’re delivering
too little. It’s not about size at all.”
Hayes says they categorize an IT organization as ‘world class’ based on
several criteria, including productivity, cycle times, cost per end
user, organization and the effectiveness of partnering. An organization
must score in the top 25 percent to be deemed world class.
Hayes says that it comes down to the fact that the best IT organizations
aren’t working harder. They’re simply working better.
”In a time of limited resources and funding, organizations cannot
afford to be fat and happy,” says Hayes. ”World-class performers are
able to achieve an 18 percent savings. And applying those best practices
are not limited to the very large or the very prosperous
organizations… They’re spending less and they’re succeeding more.”
Actually, they seem to be succeeding a lot more.
The Hackett Group reports that the companies they categorize as world
class deliver 91 percent of all projects to spec on time and on budget.
In sharp comparison, median-performing companies are only successfully
delivering projects 68 percent of the time.
The report also finds:
outsourcing, and they also outsource very differently than median
companies. Leading IT shops tend to outsource technology infrastructure,
while others tend to outsource application development;
than average companies. It’s a comparison of 28 IT staffers per thousand
end users, versus 44 for average IT organizations;
more people on application management issues, and fewer to addressing
technology infrastructure issues:
to the CEO, while 100 percent have made their senior IT executive a
member of the company’s overall senior management committee. That’s
compared to 69 percent of average companies;
on outsourcing than median companies;
simplification. They rely on 50 percent fewer ERP systems and 29 percent
fewer applications per end user.
The Hackett Group also notes in its report that world-class companies
are more disciplined overall in their management of IT projects. Half of
all world-class companies manage IT projects through a formal, permanent
Program Management Office, while only 25 percent of median organizations
do the same. The top IT shops also adhere to a common methodology 90
percent of the time, compared to 56 percent for average companies.
”What we believe is that world-class companies are focusing more on
what’s core to their business and what’s strategic to that business,”
says Hayes. ”They have a well-orchestrated plan and a simplified