The CIO of a global CPG company needed to benchmark the cost of IT across the company. It was important to make investment decisions based on how the company compared to peers.
For the previous few years, he had invited a top-tier strategy consulting firm to conduct the benchmarking on his behalf. However, for 2022, the CIO wanted to find a less expensive solution.
After an initial discussion and market scan, we selected the Gartner IT benchmarking tool for our assessment.
The Gartner IT benchmarking tool categorized the IT budget in five different ways:
- Strategic spend
- Technical function spend
- Asset spend
- Technical function staff
- IT security
We used the financial plan from the company’s SAP instance to build the total budget, and then categorized each cost center within SAP against a set of Gartner categories.
As a result, we found that while the company’s IT spend was in the top quartile among its peers, both its operating margin and labor productivity were in the top 90%.
Armed with this data, we developed a storyline for the company’s CFO that the IT budget was managed efficiently overall, given the bottom line results. However, there were still areas that the company could still improve. These included inefficient program management and an overallocation of resources to keeping the lights on, rather than to deliver innovation.
Project in Brief
Global CPG Company