Total cost to perform the process group "deliver and support information technology services", excluding depreciation/amortization, per $1,000 revenue

This measure calculates the total cost (excluding depreciation/amortization) per $1,000 revenue to perform the process group "deliver and support information technology services," which consists of delivering services and solutions within the budget provided; meeting service commitments as measured by customer-defined service criteria; and achieving customer satisfaction targets. In this measure, capital expense only includes the cost for all capitalized items acquired during the reporting period The total cost is the sum of outsourced, overhead, personnel, system, and other costs. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "deliver and support information technology services."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
105003
Total Sample Size:
847 All Companies
Performers:
25th
Median
75th
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are Dollars.

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(Total annual IT cost (excluding depreciation/amortization) * Percentage of total IT cost (excluding depreciation/amortization) allocated to IT operating cost * Percentage of IT operating cost (excluding depreciation/amortization) dedicated to process "deliver and support information technology services" *.0001) / (Total business entity revenue * 0.0010)

Key Terms

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Process Cost Components

Total cost for a process, process group, or function consists of the following five components.

Internal/In-house operating cost consists of the first four components (personnel, systems, overhead, and other).

Personnel Cost

Personnel cost is the cost associated with personnel compensation and fringe benefits of employees (i.e., those classified as FTEs which includes both full-time and salaried/hourly employees) contributing to each respective process. Personnel cost should include all of the following costs.

Employee Compensation: Includes salaries and wages, bonuses, overtime and benefits.

Fringe: Includes contributions made towards the employees' government retirement fund, workers compensation, insurance plans, savings plans, pension funds/retirement plans, and stock purchase plans. This should also include special allowances, such as relocation expenses and car allowances.

Systems Cost

Systems costs include all expenses, paid or incurred, in conjunction with:
Computer hardware or computer software acquired by the organization or provided to the organization through service contracts.

Any related costs to process, service and maintain computer hardware or computer software. The costs of providing and maintaining services for each applicable process (e.g., computer system(s) processing (CPU) time, network/system communication charges, maintenance costs for applications and data storage). This includes the costs related to LANs, WANs, etc. This does not include one-time costs for major new systems developments/replacements. Consultant fees should not be included in depreciation of new system implementations. Include only those costs that occur more than six (6) months after implementation, as normal system maintenance costs. Any systems cost (e.g., maintenance) which is outsourced to a third party supplier should be captured in the separate cost category labeled outsourced cost.

Systems cost should include all salaries, overtime, employee benefits, bonuses or fees paid to full-time, part-time or temporary employees or independent contractors who perform services relating to computer hardware, computer software, processing or systems support.

Overhead Costs

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Other Cost

Other costs are costs associated with the specified process, but not specifically covered in personnel cost, systems cost, overhead cost and outsourced cost in this questionnaire. These other costs include costs for supplies and office equipment, travel, training and seminars. Include the cost of telephones, except for that portion captured in systems cost.

External/Outsourced Cost

In determining outsourced cost, include the total cost of outsourcing all aspects of the specified process to a third-party supplier. Exclude one-time charges for any type of restructuring or reorganization. Outsourced costs should also include costs for intracompany outsourcing (i.e., reliance on a shared services center or other business entity).

Total Annual Revenue/Net Revenue

Total annual revenue is net proceeds generated from the sale of products or services. This should reflect the selling price less any allowances such as quantity, discounts, rebates and returns. If your business entity is a support unit and therefore does not directly generate revenue, then provide the revenue amount for the units you support. For government/non-profit organizations, please use your non-pass-through budget. For insurance companies the total annual revenue is the total amount of direct written premiums, excluding net investment income. Note: Business entity revenue needs to only include inter-company business segment revenue when the transactions between those business segments are intended to reflect an arm's length transfer price and would therefore meet the regulatory requirements for external revenue reporting.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (7.1.0)

  • 8.7.1 - Develop IT services and solution delivery strategy (10595) - Creating a strategy for delivering IT services and solutions. Establish the sourcing strategy. Establish the delivery process procedures and tools. Examine and choose the most effective methodologies and tools.
    • 8.7.1.1 - Establish sourcing strategy for IT delivery (10699) - Creating and implementing a strategy for sourcing delivery of IT services and solutions. Examine the pros and cons of various sources that can support the delivery process. Select the most feasible and cost-effective sources.
    • 8.7.1.2 - Define delivery processes, procedures, and tools standards (10700) - Establishing standards for the processes, methods, and equipment supporting the delivery of IT services and solutions. Manage the transportation system, delivery schedule, etc. for the delivery process.
    • 8.7.1.3 - Select delivery methodologies and tools (10701) - Assessing the tools and techniques for delivering IT services and solutions, and choosing the most appropriate tools and techniques. Evaluate the pros and cons of all the methodologies and tools available. Choose the most efficient and effective methodology.
  • 8.7.2 - Develop IT support strategy (10596) - Creating a strategy for provision of support to users of IT services and solutions.
    • 8.7.2.1 - Establish sourcing strategy for IT support (10702) - Developing a strategy for sourcing resources to support users of IT services and solutions. Establish the sources that will make use of e-mail, live support software online, or a tool where users can log a call or incident in order to retrieve IT support.
    • 8.7.2.2 - Define IT support services (10703) - Establishing services for providing support to users of IT services and solutions. Define the plethora of services by which the organization assists users of computers, software products, or other electronic/mechanical products.
  • 8.7.3 - Manage IT infrastructure resources (10597) - Managing the resources required for administration of IT infrastructure. Manage the IT inventory and assets. Take care of the organization's IT resource capacity.
    • 8.7.3.1 - Manage IT inventory and assets (10704) - Managing the complete list of IT items or resources available with the organization. Use inventory and asset management systems to automate the process of asset discovery, tracking, and reporting of the resources.
    • 8.7.3.2 - Manage IT resource capacity (10705) - Handling the resource capacity of the IT function. Manage storage, computer hardware, software, and connection infrastructure resources that can be stored as inventory or provided by the organization as needed.
  • 8.7.4 - Manage IT infrastructure operations (10598) - Managing all processes and services that are provisioned by an IT staff to their internal or external clients and used by themselves. Deliver IT services and solutions. Perform IT operations support services.
    • 8.7.4.1 - Deliver IT services and solutions (10706) - Supplying or provisioning IT services and solutions to the users. Design an IT service delivery model that defines the processes and procedures needed to deliver the IT services and solutions.
    • 8.7.4.2 - Perform IT operations support services (10707) - Executing support services for operational activities within the IT function. Use operation support systems to manage the IT operations support services.
  • 8.7.5 - Support IT services and solutions (10599) - Managing the availability of the IT services and solutions. Provide facilities. Manage backup/recovery systems. Track performance and capacity. Manage any incidents, problems, or inquires related to it.
    • 8.7.5.1 - Manage availability (10708) - Handling the availability for IT services and solutions. Manage the inventory and operations systems to ensure that the demand for the IT solutions and services is always met.
    • 8.7.5.2 - Manage facilities (10709) - Managing the facilities that support the provision of IT services and solutions. Keep facilities such as the software, hardware, and systems up-to-date in order to ensure the provision of IT services and solutions.
    • 8.7.5.3 - Manage backup/recovery (10710) - Managing backup/recovery for IT services and solutions. Copy and archive computer data so it may be used to restore the original after a data loss event. Use a backup system or application.
    • 8.7.5.4 - Manage performance and capacity (10711) - Overseeing the performance and capacity of IT services and solutions. Use key performance indicators to routinely track the performance and capacity levels of IT services and solutions.
    • 8.7.5.5 - Manage incidents (10712) - Managing instances or occurrences within the IT function.
    • 8.7.5.6 - Manage problems (10713) - Identifying, recording, and resolving any IT problems. Create and manage a problem-resolving system or function within the IT function to ensure smooth and timely operations.
    • 8.7.5.7 - Manage inquiries (10714) - Taking care of the inquiries or requests by the customers or users of the IT services and solutions provided by the organization.