World-Class IT Orgs Dramatically Outperform Typical Companies at 15% Less Cost

World-class IT organisations achieve dramatically higher levels of effectiveness, meeting ROI expectations nearly twice as often, and support up to 80 percent higher levels of business process automation, all at 15 percent less cost than typical companies, according to new research from The Hackett Group, Inc.


The Hackett Group's research details how top-performing IT organisations focus on automation and complexity reduction as essential IT strategy elements. They are significantly more effective at providing IT enablement for key business operations, and operate with up to 80 percent less complexity.


The research also spotlights four fundamental practices that differentiate world-class IT organisations from typical companies: alignment of IT metrics and formalised communication with the business; standardisation of applications and IT processes; integration of end-to-end business processes; and the monitoring of business and IT outcomes.


The Hackett Group's research is based on an analysis of comprehensive benchmark studies performed at over 100 Global 1000 companies over the past few years.


World-class IT organisations are those that achieve top-quartile performance across an array of more than 60 weighted efficiency and effectiveness metrics in The Hackett Group's IT benchmark.


"As companies grow, execute mergers and acquisitions, move into new markets, and expand their product portfolios, many naturally see increased complexity that can negatively impact performance. But this doesn't have to be the case," says John Reeves, Global IT Advisory Practice Leader for The Hackett Group.


"The performance of world-class IT organisations demonstrates that it truly is possible to 'do more with less,' minimise cost, and deliver higher qualities of service."


The Hackett Group's research found that world-class IT organisations spend 15 percent less than typical companies per end-user, including 25 percent less on labor, 9 percent less on technology, and 8 percent less on outsourcing.


Reduced complexity is a key element of how world-class IT organisations eliminate nonessential spending yet maximize staff productivity to drive down IT costs.


Hackett Group's research found evidence of this across a wide array of IT metrics. World-class IT organisations carry 70 percent less complexity in their technology platforms. In addition, they rely on 40 percent fewer applications per 1,000 end-users. So as a result, hardware and software complexity levels are significantly reduced, with 30 percent lower software complexity and 60 percent lower hardware complexity.


At the same time, world-class IT organisations demonstrate dramatically higher levels of effectiveness. They meet ROI expectations nearly twice as often as typical, deliver against anticipated benefits nearly 80 percent more often, automate up to 80 percent more business processes, and deliver dramatically higher levels of self-service enablement.

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