Understanding Benchmarking Archetypes

Summary

An organization can use Benchmarking to compare their own data to those within the Apptio Community Data (ACD). Apptio has identified four archetypes within the data that demonstrate four distinct operating models.

Apptio archetypes

What is an archetype? In this context, an archetype is defined as a typical example of an organization’s IT operating model. The ACD data is ATUM-aligned, helping to surface commonalities between the anonymized organizations’ data. Analysis of the data yields four common archetypes within IT cost pool spending patterns, and two archetypes within the application cost pool distributions.

Within the IT spend patterns, the focus of organizations are hardware technology-centric, software technology-centric, vendor-centric or people-centric.

The two technology-focused archetypes, hardware and software, demonstrate a spending pattern by the organization’s IT department that has a higher degree of spend for hardware or software, but that is comparatively less on most other cost pools outside of internal labor (which traditionally is a higher component of spend for any organization). In contrast, the vendor-centric and people-centric archetypes primarily have outside services or internal labor as the main drivers of spend.

This is illustrated in the spider plots found within the Cost Transparency (CT) Industry & OpEx Benchmark report (see image below).

This same data is also available in Interactive Benchmarking, however, it appears differently: The detail overlays the cost pool ranges of the peer data (see image below).

In the following example, this dataset shows an organization that may appear as though they are much higher in several areas, and unusually low in other areas.

Selecting the people-centric archetype slider overlays the subset of ACD where the spending patterns show a higher spend level on internal labor, but a comparatively lower spend level on external labor or outside services. In this example, the organization aligns more closely to the people-centric archetype in how they spend their IT funds. Also, this organization is spending comparatively more on software and hardware than the subgroup. This should drive a new vector of analysis, especially with software, because that spend is higher than the archetypal subgroup and is in the upper quartile of the overall ACD. This same assessment can be said of hardware, but to a lesser degree.

Conclusion

Archetypal information can be useful to an organization as a way to visually demonstrate to the business or IT leadership the current spending patterns of the IT department, and similarly-aligned organizations, and also to highlight areas that are clearly outside of the typical spending pattern. By revealing these patterns, benchmarking analysis shines a spotlight on areas for potential cost improvement.