IT Expense per Employee

IT Expense per Employee

KPI Details

IT Expense per Employee measures the average IT related expense that is incurred by each user of the company's IT services. 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. Although a low value is typically best for this KPI, companies with a greater level of IT spending per employee may view IT as a strategic investment to improve business performance and productivity. High performers of this KPI usually exhibit the following characteristics: minimal IT user support, strategic IT outsourcing strategy, regular re-negotiations of contracts for telecom service providers to reduce networking costs, etc.

KPI Definition

The expense incurred by the IT function divided by the average number of employees over the same period of time.

KPI Best Practices

• Perform regular IT audits to monitor high cost drivers
• Minimal amount of re-work and short resolution cycle times from User Support employees
• Outsource highly repetitive and non-core IT operations to lower cost centers

KPI Calculation Instructions IT Expense per Employee?

Two values are used to calculate this KPI: (1) the total expense incurred by the IT function over a certain period of time, and (2) the average number of employees working for the company over the same period of time. IT expenses include labor, applications, security, hardware, software, network infrastructure, data center expenses, facilities costs, end user devices, etc. Do not include depreciation in this calculation. To calculate average employees, add the number of employees working for the company at the beginning and end of the measurement period, and divide that number by 2.

KPI Formula :

Total IT Expense / Total Number of Employees