Benchmarking a waste?

Benchmarking your IT systems against best-practice companies might not be worth the effort, a research study has claimed. While the cost of IT continues to soar, research analysts OTR found half of all companies that undertake benchmarking of their IT function fail to make any meaningful comparisons with other industry players.

Price Waterhouse’s annual IT review, published last month, found that using computers now costs UK companies 1.8 per cent of turnover to acquire and run, up from 1.3 per cent in 1991. The 40 per cent rise is reflected across virtually every industry sector.

OTR, which interviewed executives from 1,200 European firms, found that even those companies concerned about reducing costs may be wasting money by trying to benchmark their IT department. An OTR spokesman said: “The only companies to obtain quantifiable benefits from benchmarking their IT was a subset of those who benchmarked to reduce costs. Only about half of companies who did it for this reason succeeded in doing so.”

The research also found that only companies that used external benchmarking consultants achieved quantifiable benefits. The spokesman added: “This was an unexpected conclusion, but it seemed that benchmarking companies were providing both accurate and up-to-date reference groups and comprehensive analysis techniques. Two-thirds of those organisations reporting benefits had used only external consultants to undertake their benchmarking.”