Total cost to perform the process group "develop and manage IT customer relationships", excluding depreciation/amortization, per $1,000 revenue

This measure calculates the total cost (excluding depreciation/amortization for assets acquired during reporting period) per $1,000 revenue to perform the process group "develop and manage information technology customer relationships," which manages the communications and interactions between the customers of IT and the providers of IT services and solutions; helps the customer to develop justifications for requested IT services and solutions; and monitors customers' satisfaction with the development, deployment, and ongoing support of IT services and solutions. 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 "develop and manage IT customer relationships."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure ID:
105006
Total Sample Size:
853 All Companies
Performers:
25th Median 75th
- - -
Key Performance Indicator:
Yes
Sample image showing interactive filters for more detailed measure peer group data and an interactive graph.

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 "develop and manage IT customer relationships" *.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)

  • 8.2.1 - Develop IT services and solutions strategy (10578) - Developing a strategy that creates a base for delivering IT solutions aligned with overall business needs while maintaining a tight control on delivery and costs. Conduct research within the IT services and solutions field. Translate the requirements into IT services and solutions initiatives. Coordinate with internal stakeholders to ensure alignment. Evaluate the formulated strategic initiatives to select the most feasible.
    • 8.2.1.1 - Research IT services and solutions to address business and user requirements (11244) - Conducting a detailed and systematic investigation within the field on IT services and solutions. Confirm through users and the IT function the availability of the required services and solutions.
    • 8.2.1.2 - Translate business and user requirements into IT services and solutions requirements (11245) - Evaluating the requirements and needs of business and its users. Transform these requirements into IT services and solutions requirements. Ensure that these requirements are fulfilled through IT services and solutions.
    • 8.2.1.3 - Formulate IT services and solutions strategic initiatives (11246) - Selecting and strategizing the initiatives that need to be taken in the IT services and solutions field. Create new programs and initiatives to ensure innovation and development in providing the IT services and solutions.
    • 8.2.1.4 - Coordinate strategies with internal stakeholders to ensure alignment (11247) - Synchronizing IT services and solutions strategies with internal stakeholders. Coordinate and communicate the IT services and solutions strategies and initiatives with internal stakeholders, including board members, staff, volunteers, and donors. Correlate between the IT services and solutions strategy and the overall IT strategy to ensure alignment with the internal stakeholders.
    • 8.2.1.5 - Evaluate and select IT services and solutions strategic initiatives (11248) - Assessing the strategic initiatives for IT services and solutions in order to choose the most appropriate strategic initiative. Assess the IT services and solution strategic initiatives by carefully selecting the most feasible and practical individual initiatives.
  • 8.2.2 - Develop and manage IT service levels (10579) - Establishing and maintaining service levels for the provision of IT services and solutions. Design and maintain the IT services and solution catalog, as well as service level agreements. Evaluate the performance of IT service level agreements. Communicate the results to the management.
    • 8.2.2.1 - Create and maintain the IT services and solutions catalog (10640) - Create and design an organized and curated collection of all IT-related services that can be performed by, for, or within the organization. Maintain information about deliverables, prices, contact points, and processes for requesting a service.
    • 8.2.2.2 - Establish and maintain business and IT service-level agreements (10641) - Developing and maintaining service agreements for IT services and solutions provided by the organization. Create and maintain a contract or agreement between the service provider (the organization) and the end user that defines the level of service expected. Describe the services being provided, responsiveness, procedure for reporting problems, etc.
    • 8.2.2.3 - Evaluate and report service-level attainment results (10642) - Determining, documenting, and reporting the results of service levels achieved by the IT function. Evaluate and assess the results and performance achieved by the IT service-level structure of the organization. Create metrics and indicators to measure the volume and quality of work (including precision and accuracy), speed, responsiveness, and efficiency of the structure. Report the results to management.
    • 8.2.2.4 - Communicate business and IT service-level improvement opportunities (10643) - Conveying the improvement opportunities for the business and level of IT services. Leverage the results obtained from the performance metrics of the business and IT service levels to identify and recognize any opportunities that would improve or enhance the efficiency of the business and IT service-level structure. Communicate these opportunities to management in order for the improvements to take effect.
  • 8.2.3 - Perform demand-side management (DSM) for IT services (10580) - Selecting, planning, and implementing measures that should influence the demand, or customer side, for the organization's IT services and solutions. Analyze the recent IT services and solutions consumption levels. Develop strategies to improve the consumption efficiency. Estimate the future volume/unit consumption by taking the improvements into account.
    • 8.2.3.1 - Analyze IT services and solutions consumption and usage (10644) - Evaluating and comprehending the use and consumption of IT services and solutions. Take into account the consumption by every end user in order to calculate indicators such as average usage per user and total usage per user.
    • 8.2.3.2 - Develop and implement incentive programs that improve consumption efficiency (10645) - Creating and delivering incentive programs for improving the consumption efficiency provided by IT services and solutions.
    • 8.2.3.3 - Develop volume/unit forecast for IT services and solutions (10646) - Gauging the effect of the incentive programs and initiatives to intelligently forecast the future volume/unit consumption and usage of the IT services and solutions.
  • 8.2.4 - Manage IT customer satisfaction (10581) - Recording and analyzing customer satisfaction levels. Identify customer satisfaction patterns through the data. Initiate new strategies to improve customer satisfaction levels base on the customer satisfaction patterns.
    • 8.2.4.1 - Capture and analyze customer satisfaction (10647) - Recording and analyzing how IT services and solutions meet or surpass customer expectations. Leverage techniques such as Csat score, net promoter score, and customer efforts score.
    • 8.2.4.2 - Assess and communicate customer satisfaction patterns (10648) - Determining patterns of customer satisfaction, and conveying them to management. Analyze individual components such as purchasing patterns, requirements, and expectations. Communicate the results to management. (Carefully examine Capture and analyze customer satisfaction [10647] in order to reach meaningful conclusions.)
    • 8.2.4.3 - Initiate improvements based on customer satisfaction patterns (10649) - Creating an improvement strategy based on customer service response patterns. Leverage customer loyalty, experience, expectations, and interactions. Incorporate customer feedback.
  • 8.2.5 - Market IT services and solutions (10582) - Developing a strategy that effectively markets IT solutions and services through advertising and promotions campaigns. Track and process orders for IT services and solutions.
    • 8.2.5.1 - Develop IT services and solutions marketing strategy (10650) - Creating a strategy for effectively marketing IT services and solutions. Create a promotional strategy, pricing strategy, competitive strategy, etc. to enhance the market and market reach of the organization.
    • 8.2.5.2 - Develop and manage IT customer strategy (10651) - Developing and administering the strategy for IT customers. Create a plan to create services and solutions, conduct daily operations, and train new employees.
    • 8.2.5.3 - Manage IT services and solutions advertising and promotional campaigns (10652) - Effectively communicating and raising customer awareness of a product or brand, generating sales, and creating brand loyalty within the end users of the organization's IT services and solutions. Create advertising and promotional campaigns. Implement the campaigns through various means of communication such as television, posters, and the internet.
    • 8.2.5.4 - Process and track IT services and solutions orders (10653) - Monitoring orders for IT solutions and services, and processing them on time. Accept and approve orders so they may be completed.