Total cost to perform the process group "deploy information technology solutions", 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 "deploy information technology solutions," which introduces new, enhanced, or improved functionality into the environment with minimal or no disruption to the services schedules; ensures consideration of appropriate security and contractual constraints; and properly balances business benefit with technical and business risk. 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 "deploy information technology solutions."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
105004
Total Sample Size:
850 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 group "deploy information technology solutions" *.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)

  • 8.6.1 - Develop the IT deployment strategy (10592) - Creating and implementing a strategy for the deployment of IT solutions. Define all of the activities that make the IT function available for use. Establish the change policies for IT services and solutions. Define the deployment process, procedures, and tools. Select the most feasible and practical methodologies for the deployment process.
    • 8.6.1.1 - Establish IT services and solutions change policies (10686) - Defining policies regarding changes in IT services and solutions. Manage changes in a rational and predictable manner so that employees can plan accordingly. Reduce the negative impact to the user community. Increase the value of IT services and solutions.
    • 8.6.1.2 - Define deployment process, procedures, and tools standards (10687) - Outlining standards processes, methods, and equipment for deployment of IT solutions. Manage the subversion server, production server, development server etc. to make the IT services and solutions available for internal/client use.
    • 8.6.1.3 - Select deployment methodologies and tools (10688) - Assessing the tools and techniques for deploying IT solutions in order to choose the most appropriate options. Evaluate the pros and cons of all the methodologies available. Choose the most efficient and effective methodology.
  • 8.6.2 - Plan and implement changes (10593) - Strategizing and executing changes in IT solutions and services. Create a plan for deploying the changes. Communicate with stakeholders about the changes. Administer and implement the changes. Train the resources who will be affected by these changes. Install changes and verify their effect.
    • 8.6.2.1 - Plan change deployment (10689) - Creating plans for deploying the change in IT services and solutions. Define the changes. Implement a plan.
    • 8.6.2.2 - Communicate changes to stakeholders (10690) - Coordinating the changes in IT services and solutions with stakeholders. Communicate with creditors, directors, employees, owners (shareholders), suppliers, unions, and the community from which the business draws its resources.
    • 8.6.2.3 - Administer change schedule (10691) - Managing the schedule for implementation of change. Plan and carry out a process or procedure to implement the predefined changes.
    • 8.6.2.4 - Train impacted users (10692) - Preparing users for changes in IT solutions. Conduct training sessions and engagement activities to familiarize users with the new changes.
    • 8.6.2.5 - Distribute and install change (10693) - Administering and implementing the changes in place for the new strategies to take effect. Install new components, software, hardware, etc. onto the systems of the affected users.
    • 8.6.2.6 - Verify change (10694) - Confirming that the changes to the IT function have met expectations.
  • 8.6.3 - Plan and manage releases (10594) - Managing, planning, scheduling, and controlling an IT software or service build through different stages and environments, including testing and deploying its release. Understand the release design and acceptance. Plan the release rollout. Distribute and install the release. Verify the release.
    • 8.6.3.1 - Understand and coordinate release design and acceptance (10695) - Coordinating the deployment of new IT services and understanding the traction and level of approval for the same. Administer and synchronize the release of IT service packages. Manage version control and the uptake and level of acceptance.
    • 8.6.3.2 - Plan release rollout (10696) - Creating a plan for introducing the IT services and solutions provided by the organization in the market.
    • 8.6.3.3 - Distribute and install release (10697) - Distributing and implementing the release of changed IT solutions. Administer, implement, and install the releases onto internal systems. Provide methods for installing releases on client users.
    • 8.6.3.4 - Verify release (10698) - Confirming that the release has met expectations.