IT Cost as % of Revenue
Total IT expenditure as a percentage of total revenue
What is IT Cost as % of Revenue?
IT cost as a percentage of revenue is the share of revenue an organisation spends on information technology. It shows how much of income goes into technology.
It is used to compare IT spending over time and against similar organisations, though the right level depends on how much the business relies on technology.
How this KPI is measured
- Function
- Information Technology
- Sub-function
- IT Cost Management
- Industry
- All Industries
- Type
- Lagging
- Impact
- Financial control
- Unit
- %
- Measurement frequency
- Quarterly / Annual
- Formula
- (Total IT spend / Total revenue) × 100
How to calculate it
Divide total IT spend by total revenue, and multiply by 100.
For example, if IT spend was 3,000,000 and revenue was 100,000,000, the share is 3%.
Define IT spend consistently, including people, hardware, software, cloud and services, and compare with similar businesses and with your own history.
Where it is used
Benchmarking
Compare with peers.
Planning IT budgets
Set spend relative to growth.
Discussing investment
Frame technology costs.
How to improve it
Tips and common mistakes
- Lower is not always better. Technology can drive growth.
- Technology-intensive businesses spend more.
- Look at the split between running and changing the business.
More Information Technology kpi library
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