APQC White Paper Reveals How CIOs Can Reduce Costs While Strengthening Their Organization

Top Performers Deliver Superior Service at Less Than One-Half the Cost of the Typical IT Organization

(Houston, TX - July 16, 2009) - Cost reduction is the name of the game in IT departments today. Deciding what to do and what not to do when painful tradeoffs have to be made requires a combination of informed
decision making and clear leadership.

APQC's latest white paper, IT Cost Cutting: Scalpel vs. Hatchet—How to Cut Costs
and Make Smart Investment Decisions, offers IT benchmarks and advice for closing performance gaps.

According to Lisa Higgins, chief operating officer for APQC, "Our research found that today's top performing CIOs lead organizations that achieve a higher return on capital investments, are more productive, complete more projects on time, and do it all at less than half the cost of the typical organization."

Key efficiency benchmarks identified in the paper include: 

 

 

 

Median

 Top quartile

  

Total IT budget as a % of revenue 

 

 1.5%

 0.7%

 

Total IT budget per employee

 

$4,923 

$1,887

 

 IT expense per employee

 

 $4,663 

 $1,804

Source: APQC

According to the research, effective cost-cutting efforts start with a thorough review of the current IT cost structure. Done right, this type of analysis will reveal opportunities for surgically trimming operating costs and prioritizing capital investments, enabling organizations to avoid indiscriminate and counterproductive cuts.

Key Findings
The white paper, based on the Open Standards Benchmarking CollaborativeSM (OSBC) benchmarking database and APQC research, found that the choices IT professionals make to reduce costs revolve around structure, integration, standardization, and preparing for new technology, even if it cannot be implemented yet.  Decision factors include:

  • Balancing moves that deliver immediate cost benefits with longer-term initiatives designed to improve organizational effectiveness.
  • Projects that move forward today must deliver immediate cost reductions or fulfill regulatory requirements.
  • Other spending cuts can be more surgical, targeted at root causes, and capable of delivering long-term benefits—even if those benefits are not evident right away.

About APQC

APQC is the leading resource for performance analytics, best practices, and process improvement worldwide. Our research studies, benchmarking databases, and renowned Knowledge Base provide managers with intelligence to transform their organizations for better results. A member-based nonprofit founded in 1977, APQC serves FortuneGlobal 1000 companies and government organizations. For information, visit www.apqc.org or call +1.713.681.4020.

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