course materials

1. Total IT Spending as Percentage of Revenue Paper
Question Description1. In your own words, describe a typical database. What kind of
information is stored in a database? Who are the typical users of databases?2. Choose three
IT metrics from pages 31-44 in the PDF IT Benchmarking. Describe how those metrics
would be useful in managing an IT organization. The MATURITY IT-Benchmarking (Links to
an external site.) video should be helpful in formulating your response. Also, explain why
comparing those metrics for one company to the same metrics for another company
(benchmarking) might be helpful.Then Give some thought about two post from others
student. (4-5 sentence)A. IT metrics are quantifiable measurements that help IT leaders
efficiently manage the business of Information Technology. Defining, measuring, and
reviewing IT metrics helps IT leaders build a foundation for conversations about the value
technology provides to the business IT metrics help CIOs determine the value of technology
and build confidence in IT performance. IT metrics help in evaluating IT investments,
performance, and delivery.Below are the 3, IT metrics, I have chosen to describe how these
metrics would be useful in managing an IT organizationTotal IT spending as percentage of
revenue Information Technology investments represent a growing percentage of corporate
spending, and many organization stakeholders expect investments to be aligned with
business strategy. In addition to the traditional industry benchmarks, investment strategy
increasingly depends on existing technology capabilities, business strategy, and the
competitive environment. As CIOs’ mandates change from value preservation to value
creation, optimizing IT investments has become a top priority for them and their
stakeholders.Total IT spending as a percentage of revenue is a key metric that most
organizations use to benchmark their IT spending levels. It is calculated by dividing the
company’s IT operational spending plus depreciation by the firm’s total revenue. It can also
be calculated on a cash basis by using total IT spending, including capital spending, and
omitting depreciation. Although the calculation is straightforward, it is essential to
understand how this metric varies by industry, company size, and region.For example, if the
CEO heads up a healthcare company, the CEO will want to look at the percent of revenue
figure for IT departments in other healthcare companies. Perhaps the industry typically has
a technology expense of 2.5 percent to 3 percent. If the IT department has a percentage
much larger than that, perhaps the CEO will need to understand why the IT shop is not
functioning as efficiently as others within the industry. The CEO will also want to know how
the company can beat the industry averages. The key here is that the expenditure must be
an investment that provides quantifiable and tangible benefits to the companyTotal IT

2. spending per user One mistake that IT leaders make in bench marking their IT spending
levels is only to look at their IT budgets as a percentage of revenue. To get a more complete
picture, it is advisable to use other ratios as well, as shown in the below Figure 1. For
example, look at IT spending per employee or better yet, IT spending per user. The latter is
more significant, because IT organizations must support users whether they are employees.
Healthcare companies, for example, tend to have many more users than employees. On the
other hand, in some companies, especially in manufacturing, not all employees are users of
IT. Total IT spending per PCNearly two-thirds of small businesses and organizations are
expected to buy new IT equipment every year, replacing one in four office computers.
Vendors now offer powerful computers at discounted prices, but what will this equipment
really cost you in the long run? Whether you purchase a PC, notebook, server or other
network hardware, you will likely experience sticker shock once you factor in the total cost
of ownership (TCO).Tight budgets and limited expertise often keep small organizations
from making effective IT decisions. However, understanding hidden technology costs can
help to reduce unnecessary expenditures and reallocate resources to more important
businessAn unmanaged or poorly managed desktop PC costs more than $5,000 per year.
When factoring in associated network costs, such as firewalls, storage, servers, routers,
printers and internet connectivity, estimates exceed $8,500 per PC annually.Remember that
the initial purchase is just a fraction of the total cost of ownership (TCO), which means a
$1,000 PC could cost more than $15,000 over its three-year lifespan. If a 10-person
organization upgrades its PCs every three years, it likely spends a minimum of $120,000
managing those computers after the purchase. IT spending is really a balancing act between
hardware, software and services. According to Gartner, strong PC management is the key to
overall cost reduction. The more money allocated for direct IT expenditures, such as
operations and administration, the less money will be wasted on lost productivity and
downtime.Unfortunately, the reverse is also true. Because of declining IT budgets over the
last few years, organizations have been forced to hold back on new purchases and
temporarily band-aid ailing IT systems. However, pinching pennies on proper infrastructure
and management procedures will cost you dearly in the long run.Therefore, a good
benchmark of IT spending per desktop (or, per PC/laptop) is needed, to know if the
organizations IT spending for PCS is as efficient as others within the industry. So, IT
spending per PC metric will help business to benchmark the IT spending levels for PCs.This
can provide another perspective in cases where users have more than one desktop/laptop,
users share PCs (e.g. across multiple shifts, for example, in a hospital), or where there are a
significant number of desktop computers in laboratories, classrooms, or other shared
environments. These scenarios also need to be considered while keeping the IT benchmark
in mind.The intent of benchmarking is to compare your own operations to that of
competitors or other companies and to generate ideas for improving processes, approaches,
and technologies to reduce costs, increase profits and strengthen customer loyalty and
satisfaction.Not only can you get an organized overview of your company and how it
performs on different levels, you can also be competitive. Benchmarking means you can
easily spot when a competitor is doing well or beginning to struggle, both prime times to
evaluate your own strategy. ReferencesIT Metrics and KPIs. (n.d.). Retrieved from

3. https://www.apptio.com/it-metrics-and-kpisKark, K., & Shaikh, A. (2017, November 28).
Technology budgets: From value preservation to value creation. Retrieved from
https://www2.deloitte.com/us/en/insights/focus/cio-insider-business-
insights/technology-investments-value-creation.htmlResearch Bytes. (n.d.). Retrieved from
https://www.computereconomics.com/Reh, F. J. (2019, July 26). Why Your Business Should
Be Benchmarking and How to Get Started. Retrieved from
https://www.thebalancecareers.com/overview-and-exa…B. Metrics can play an important
role in achieving excellence as they force the organization to pay attention to their
performance and prompt management to make adjustments when goals are not being
achieved. Following are the three metrics that I selected for this discussion:IT staff
headcount change from previous yearStaff headcount is important as it is the most
expensive operational expense for a company. If headcount is not tracked at a minimum of
an annual bases, it could balloon out of control causing an IT organization or any
organization to fail due to unnecessary expenses. Headcount metrics are also important to
evaluate salaries and wages in order to determine pay increases and to figure out the
number of employees by department or location in order to assess staffing needs.IT staff
turnoverVoluntary: This type of turnover usually occurs because the employee is unhappy
at work, whether because of conflicts, improper compensation or management, or even
because they weren’t the right fit for the job, team, or company. The metrics for voluntary
turnover aid in understanding why team members are leaving. These metrics are important
as they help organizations resolve any internal issues that may be occurring that cause
employee’s to leave. If this metric is high, it should raise a red flag to review the reasons
why and create resolution.Involuntary: This type of turnover occurs when an employee is
not a good fit for the organization. It could be due to poor performance, behavior issues, or
reorganization. These metrics are important in case of potential litigation or unemployment
filings.Annual training allocation per IT employeeA common metric is training expenses per
IT employee. This metric is helpful in tracking development costs. It also helps management
make smarter investments in developing personnel. Organizations are realizing that day-
long training courses are both expensive and inadequate in providing the continuous
learning experience sought by employees. Investing the available budget in continuous
learning experiences will lead to a much more effective training program for
employees.Benchmarking allows an organization to focus on best practices and allows an
organization to get detailed comparisons between themselves and other like companies.
Benchmarking is also a way of discovering what is the best performance being achieved and
by what company. It could be within the company, by a competitor, or by an entirely
different industry. This information can then be used to identify gaps in an organization’s
processes in order to achieve a competitive advantage.https://www.paycor.com/resource-
center/why-employee-turnover-is-the-single-most-revealing-hr-metric (Links to an
external site.)https://chconsultinggroup.com/2015/10/what-is-benchmarking-and-why-
is-it-important-to-your-business/