Comparing Your IT Shop To Others

CIOs should strive to improve organization effectiveness and value. One popular way to focus on IT performance improvement is to compare an IT organization's performance to other firms through benchmarking that exclusively focuses on comparing IT costs. But benchmarking on cost is not sufficient and can be dangerous. Cost alone does not take into consideration firm-specific factors such as business expectations or context, nor does it give insight into how a firm achieves its numbers — a low-cost organization could simply do less with less. To drive performance improvement, CIOs must look at the practices that underlie costs, and they need to ensure that they are comparing themselves to CIOs at firms with similar demands and challenges.