MOOSE Metric: IT Cost Excluding New IT Investments
MOOSE is defined by Forrester as the spending to Maintain and Operate the IT Organization, Systems, and Equipment (MOOSE) as a percentage of revenues. One of the difficulties of benchmarking overall IT spending is that IT spending may be providing a positive ROI to the business: thus more total IT spending may signify a company is more efficient. Hence being higher or lower than the benchmark can be extremely misleading (higher spending might be a good thing.) MOOSE seems to help solve that problem, quantifying just the costs of operations.
“Since 2005, Forrester has argued that the best IT spending benchmark is not overall IT spending as a percentage of revenue, but rather IT spending on ongoing operations and maintenance relative to revenues — what we have called IT MOOSE. We believe that IT MOOSE as a percentage of revenues is a more accurate and useful benchmark than other commonly used ones, such as IT spending as a percentage of company revenues, IT spending per employee, or IT staff as a percentage of total employees.”
In the financial sector, for example MOOSE in 2007 was around 8.2% with a median of about 5% with MOOSE being abut 66% of IT spend.
In government and public services MOOSE was about 6.8% average and 5% median with MOOSE being about 72% of IT spend.
The MOOSE metric allows organizations to clearly assess “Are we getting more or less efficient over time” (MOOSE going up or down)
The original article covering IT spending may be found at this link.
Thanks also to Frank Vogelezang for pointing out this excellent report.
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