IT Expense as a Percentage of Total Expense

Metric Details & Benchmarking Report Download

KPI Benchmarks : IT Expense as a Percentage of Total Expense

  • Benchmark Range 1.4% - 6.9%
  • Benchmark Average 4.0%
  • Benchmark Sample Size (n) 54

* Is High or Low Best: Lower is Better


Download a Sample IT Expense as a Percentage of Total Expense

KPI Details : IT Expense as a Percentage of Total Expense

IT Expense as a Percentage of Total Expense measures the allocation of operational spending that is attributed to the IT function. Excessive IT costs can be a sign of slow cycle times, high rework rates or poor employee performance. A high value can also indicate inefficient IT service operations, poor cost efficiency practices related to IT procurement or general overstaffing within the IT Department. A growing IT expense over time can be reduced through minimizing IT user support, outsourcing IT operations where applicable, re-evaluating contracts for telecom service providers to reduce networking costs, etc.

KPI Best Practices : IT Expense as a Percentage of Total Expense

  • IT Support employees support a large number of employees/users
  • Re-evaluate IT vendor contracts on a regular basis to seek cost reduction/avoidance opportunities
  • Outsource highly repetitive and non-core IT operations to lower cost centers

KPI Calculation Instructions IT Expense as a Percentage of Total Expense?

Two values are used to calculate this KPI: (1) the total expense incurred by the IT Department, and (2) the total company-wide operational expense incurred during the same measurement period. IT expenses include labor, applications, security, hardware, software, network infrastructure, data center expenses, facilities costs, end user devices, etc. Only include operating expenses in this calculation. Do not include interest expenses or depreciation expenses in this calculation.

KPI Formula :

(IT Department Expense / Total Company-Wide Expense) * 100

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