Gartner IT Key Metrics Data

2011 SUMMARY REPORT

Key Outsourcing Measures: Summary Report This report contains database averages and only represents a subset of the published metrics and custom analysis capability available through Gartner Consulting Benchmark Analytics. Sourced from Gartner RN# G00208298 IT Key Metrics Data 2011: Key Outsourcing Measures: Outsourcing Profiles: Overview.

IT Key Metrics Data Summary Report

IT Key Metrics Data 2011 Summary Report

Jamie Guevara Eric Stegman Linda Hall

Thank you for your participation in the IT Key Metrics Data Survey. This IT Key Metrics Data 2011 Summary Report provides an overview of IT Outsourcing Key Metrics as well as provides some insight into the distribution of that spend on average. This report contains database averages and only represents a subset of the metrics and prescriptive analysis available through Gartner Consulting Benchmark Analytics. Questions? Interested in a Custom Extract or Benchmarking? Contact us at benchmarkinginfo@gartner.com

2011 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

Gartner IT Key Metrics Data Series Overview

IT Key Metrics Data is part of the Gartner Consulting Benchmark Analytics range of solutions and offers a macro-level look at Gartners global database of comprehensive cost and performance measures. IT Key Metrics Data provides you with immediate access to authoritative data on IT staffing and investment levels as well as key technology cost and performance metrics. The spending profiles published represent key metrics data collected directly from CIOs, CTOs, IT leaders and practitioners with respect to their organizations IT investment levels and future IT budgets. These metrics enable improved budget and investment decisions with regards to the business and ITs changing environments. The IT Key Metrics Data program was established in the 1995 to support the strategic IT investment decisions of a G8 nation. Today IT Key Metrics Data is delivered online in an annual Gartner publication series of over 2000 metrics across 92 documents categorized by 5 core technology topic areas to allow you to rapidly identify high level IT spending, staffing and performance trends across 21 different industries as well as by technology area. These key metrics reports are broadly defined by 5 key areas of the IT portfolio: Key Industry Measures Enterprise-level total IT spending and staffing metrics across 21 industry verticals. Including current year and multiyear averages. Metrics based on enterprise size are often provided. Key Infrastructure Measures Technology domain specific unit cost, productivity and performance measures for the IT infrastructure environments. Including current year and multiyear averages for the Mainframe, Wintel server, Unix server, Storage, Client & Peripheral Support, IT Help Desk, Data and Voice Network environments. Metrics by workload size are often provided. Key Applications Measures Application Development and Application Support spend & staffing metrics, project measures, life cycle phase, productivity and quality measures (current year and multiyear). Key Information Security Measures Enterprise-level total spending and staffing measures by industry and region. Key Outsourcing Measures Enterprise-level total spending and staffing measures by industry and region. For a complete outline of all related published research in the series, see RN# G00208192 IT Key Metrics Data 2011: Index of Published Documents and Metrics (http://www.gartner.com/resId=1495114).

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

TABLE OF CONTENTS
IT Key Metrics Data: 2011 Outsourcing Summary Report.................................................................4 Outsourcing Spend as a Percent of IT Spend ......................................................................4 Outsourcing Spend as a Percentage of IT Budget by Industry ............................................5 IT Outsourcing Dollars Managed per FTE Total ..............................................................6 Percent of Services Outsourced by Function .......................................................................7 Satisfaction with Outsourced Services by Function ..............................................................8 How Organizations Satisfy Benchmarking Clauses in Their Outsourcing Contracts............9 Performance Measurement Solutions from Gartner ...........................................................10 About Gartner ......................................................................................................................11

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

IT Key Metrics Data: 2011 Outsourcing Summary Report Looking Ahead

The measures that follow highlight key IT outsourcing metrics. The measures explored should help to identify overall trends, although individual variations from these trends may be justified by specific business needs, as well as differences due to size and complexity of an organizations environment.

Outsourcing Spend as a Percent of IT Spend

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% = Range = Average = Middle Quartiles 23%

Source: Gartner IT Key Metrics Data 2011

IT Outsourcing spend as a percentage of the total IT cost provides insight into the role of outsourcing in IT.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

Outsourcing Spend as a Percentage of IT Budget by Industry

Telecommunications Media and Entertainment Construction, Materials, and Natural Resources Transportation Industrial Electronics and Electrical Equipment Utilities Government - National/International Energy Food and Beverage Pharmaceuticals, Life Sciences, and Medical Products Industrial Manufacturing Banking and Financial Services Chemicals Retail and Wholesale Professional Services Insurance Consumer Products Software Publishing and Internet Services Government - State/Local Healthcare Providers Education 0% 5% Percent 10% 29% 29% 28% 28% 28% 27% 27% 27% 25% 24% 23% 23% 22% 22% 21% 20% 19% 16% 14% 14% 15% 20% 25% 30% 35% 33%

Source: Gartner IT Key Metrics Data 2011

The percentage of IT outsourcing varies significantly by industry.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

IT Outsourcing Dollars Managed per FTE Total

Thousands $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 = Range = Average = Middle Quartiles $6,109

Source: Gartner IT Key Metrics Data 2011

All companies who outsource require internal resources to manage their contracts. Development and ongoing management of issues such as vendor selection, negotiation, terms and conditions, service levels, points of contact, rules of engagement, problem resolution, escalation, and discount structures are some of the key functions that must be performed by internal IT staff responsible for managing the contract. The chart above shows on average how much outsourcing contract value one FTE performing these functions for a company supports.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

Percent of Services Outsourced by Function

Help Desk WAN File/Print Services Telecom (exc. transmission) Data Center - Applications Servers Desktop E-mail/Messaging Applications Support Applications Development Data Center - Mainframe Services LAN 0% 10% 20% Percent 30% 40% 50% 48% 47% 47% 46% 44% 41% 41% 41% 41% 50% 60% 55%

Source: Gartner IT Key Metrics Data 2011

Organizations were asked what percentage of each function is outsourced. These results represent the average of the responses. Percentage WAN outsourcing does not include transmission costs.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

Satisfaction with Outsourced Services by Function

Telecom (exc. transmission) Applications Support WAN LAN Desktop Help Desk File/Print Services Data Center - Mainframe Services E-mail/Messaging Applications Development Data Center - Applications Servers 3.00 3.10 3.20 3.20 3.30 3.40 3.50 3.25 3.30 3.40 3.40 3.39 3.38 3.38 3.36 3.35 3.35

Source: Gartner IT Key Metrics Data 2011

Satisfaction levels are measured on a scale of 1-5 where 1 = least satisfied and 5 = most satisfied.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

How Organizations Satisfy Benchmarking Clauses in Their Outsourcing Contracts

Use a 3rd party benchmarking firm Use internal resources to analyze efficiency improvements (no external comparison) No benchmarking clauses exist in our contracts 22% 32%

27%

Use the same vendor who provides the services

11%

Use Informal Peer Comparisons Use industry consortium of which I am a member 0%

Source: Gartner IT Key Metrics Data 2011

6%

1%

10% Percent

20%

30%

40%

Most large outsourcing contracts have benchmarking clauses. A typical benchmarking clause states that at some point during the life of the contract, pricing is to be compared to the external marketplace. This is done to ensure that pricing remains competitive. Performing these comparisons can be challenging because not two outsourcing contracts are exactly alike.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

IT Key Metrics Data 2011: Outsourcing Summary Report

Performance Measurement Solutions from Gartner

IT Custom Benchmark and Executive Solutions These solutions analyze the costs associated with operating internal IT functions and the price competitiveness of outsourced IT services. Gartner IT Custom Benchmarks are individually configured, project-specific benchmarks that support mergers and acquisitions, the implementation of packaged software, or the support of major outsourcing contract evaluation. Through on-site data collection and client interviews, Gartners IT custom benchmarks leverage proven tools, and prepackaged measurement components to streamline the process and ensure quality. Gartner IT Executive Benchmarks help to support periodic events such as a performance review, strategy planning and the annual budgeting cycle. The Gartner team helps to collect the necessary data and the results are delivered in a formal on-site presentation. IT Executive Benchmarks provide a detailed analysis of the situation and are focused on delivering tangible results. We provide peer-group price & cost comparisons for clients in the following areas: Application Development and Support (including ERP Support) Client & Peripheral Support and IT Help Desk Data and Voice Network Enterprise Computing (Unix, Wintel, Linux, Mainframe) and Storage IT Service Catalog Rate Assessments Outsourced IT Services High-Level Spending and Performance Scorecards and Metrics Gartner for IT Leaders Scorecard: Provides an objective rapid assessment of IT investment or costs and productivity levels, designed to identify strengths and areas for improvement based on a peer comparison using standard measurement frameworks for tracking and communicating IT performance. CIO Scorecard IT Budget Scorecard Application Development and Support Scorecard Green Information & Communications Technology (ICT) Scorecard Information Security Scorecard Infrastructure & Operations Scorecard PMO Scorecard And more... Gartner IT Key Metrics Data: Published Metrics, IT Key Metrics Data provides you with immediate access to authoritative data on staffing levels, spending, key performance metrics and trends for all areas of IT to support your business.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

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IT Key Metrics Data 2011: Outsourcing Summary Report

About Gartner

Gartner Consulting brings together Research insight, Benchmarking data, problem-solving methodologies and hands on experience to improve the return on your IT investment. Understanding: We know the issues you face 80% of the Fortune 500 use Gartner for their key technology initiatives We deliver business value in over 1500 high-impact initiatives a year Every year, we deliver over 5,500 IT cost and performance benchmarks

More information on Gartner Benchmark Analytics can be obtained by contacting your Account Executive, or going to www.gartner.com/benchmarking

Capabilities: The data, tools and capabilities to help Gartner solutions address the specific needs of each industry All of our solutions are based on Gartner's extensive Research Every solution makes use of our performance benchmarking data We employ seasoned consultants, with an average of 15 years experience

To participate in more IT Key Metrics Data surveys go to: www.gartner.com/surveys

Experience: We help you deliver tangible results Our clients spend 38% less than their peers for the same workload In 2008, our contract optimization services saved our clients over $400M Gartner, Inc. (NYSE: IT) is the worlds leading information technology research and advisory company. We deliver the technology-related insight necessary for our clients to make the right decisions, every day. From CIOs and senior IT leaders in corporations and government agencies, to business leaders in high-tech and telecom enterprises and professional services firms, to technology investors, we are the valuable partner to 60,000 clients in 11,000 distinct organizations. Through the resources of Gartner Research, Gartner Executive Programs, Gartner Consulting and Gartner Events, we work with every client to research, analyze and interpret the business of IT within the context of their individual role. Founded in 1979, Gartner is headquartered in Stamford, Connecticut, U.S.A., and has 4,400 associates, including 1,200 research analysts and consultants, and clients in 85 countries.

Publication Date: January 18, 2011 2011 Gartner, Inc. and/or its affiliates. All rights reserved. Gartner is a registered trademark of Gartner, Inc. or its affiliates.

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