There is a director who works in the same organisation with my client who often expresses his disagreement with the size of the IT department there. The organisation is small with about 90 total employees, while the IT department has 7 employees including the IT director. In his view, the IT department should have no more that 3 users.

I’m not sure where he got that idea from – that there is some standard formula that determines the ratio of IT staff to total employees – and from the comments in the forum, it seems that many people have that same question on their minds.

So let me answer that question for you: There is no standard for IT staff to total employee ratio, nor should there be any.

Industry Averages

The Gartner 2013 Key IT Metrics Report shows that the Cross-Industry average of IT Full Time Employees as a percentage of Total Employees is 5%. In the Banking and Financial services sector, the average is 9.6%, and in the insurance sector is 11.7%. Again, this is the average, which means that some organisations in the sector have less than the average, and some have more.

I dislike the use of industry averages for decision making as it implies striving for mediocrity. In my view, any decision on the size of the IT department using industry averages is stupid and short-sighted. Do you look at industry averages of revenues and say, “our revenues were $2 million, but the industry average is $1 million. Let’s cut back!”? No! So why do the same with staffing requirements?

How Should You Size IT

IT staffing requirements, as for any staffing requirement, all depend on the needs of the organisation.

Business Growth

Is the organisation growing? Then you may find that support issues are not being resolved in a timely manner, and you may need more staff. If more services are being brought on-stream, then again you may either need additional staff or skills to support that service and the necessary infrastructure.

Your staff will also be required to have the time necessary to figure out how to grow the services to meet the growing business, which means that they can’t be 100% allocated to fighting fires, that is, only addressing support issues. You may even find that it’s not so much the quantity of staff that’s important, but the quality. You will need staff that know how to get you where you want to go.

Is the business shrinking? If it’s because of competition, then you may need to invest more in IT – both in services and in skills – to improve your competitiveness. If it’s because of market or environmental conditions, then that’s a more complex matter, and and solutions vary on a case by case basis.

IT Dependence

What about your services? If your IT services is critical to your business and highly utilised, then having a high number of staff may be critical to keeping your business going. For some organisations, even outsourcing certain functions is out of the question because of the value of the service being provided.

If, on the other hand, your IT services are not that critical to the business, then a low number of staff may be required, and you may be able to outsource much of the support to outside parties.

What about your infrastructure? If you are outsourcing the IT infrastructure, such as using a cloud service or another managed service, you may find that you need less staff.

Data Security

Is your data highly valuable? Well, all data is valuable, but some is more valuable than others. Your business may consider that financial and customer data is important and everything else is not. In this case, you may find that a small number of staff is required to keep that data secure.

However, if you have much more data to secure, such as in the banking sector, you need a larger amount of staff to ensure least privilege, and to have the required checks and balances in place.

IT Staff Utilisation

Does your IT staff have too much to do? If you have IT staff that’s 100% allocated to tasks at all times, then there’s a problem whenever that person needs to go on vacation or is sick. Ensure that you have redundancy so that work can continue even of a person is absent.

However, if you have staff that spends most of the day doing nothing, then perhaps you need to relook your staffing needs, or get better employees. Even in downtime, employees can use that time to better themselves by learning new skills, or figuring out new ways that IT can help the business.

Conclusion

Of course, you may never get a right number. I’ve gone to a lot of places where the IT department never seems to have enough people, but a deeper look showed a number of inefficiencies, which also tend to worsen as more people join the fray. As they say, too many cooks spoil the broth. It’s important to always appropriately analyse the situation before making a decision.

In summary, choosing the number of IT staff in your business simply because of some arbitrary ratio – industry average or otherwise – is unwise. You should decide the number based on the needs of the business – growth, services, infrastructure and security.

Properly staffing your IT department can go a long way to ensuring business success in the long run.

Original article: Is there a standard ratio of IT Staff to Total Employees?'">How Large an IT Staff Do You Need Is there a standard ratio of IT Staff to Total Employees?

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One company, Company A, opened in the late 1970’s, and the other, Company B, opened in the mid 1980’s – about seven years apart.

Company A is a thriving, growing business that has diversified itself in different areas, while Company B is stagnated (even shrinking) and struggling. Although Company A had a seven year head start over Company B, the place where Company B is now is nowhere close to where Company A was seven years ago.

I had the opportunity to speak to both owners about how they run their business (not at the same time of course) and here are a few things that I found.

• Company B focuses on low price going after customers seeking low price. Company A goes after customers who want high-value and are willing to pay a higher price.
• Company B is using the same old printers that it had for decades. Company B has invested lots of time and money in new technology, including digital printing, continuously over the years.
• Company B has staff that is unionized, even though it’s a very small business, and the owner constantly complains about them. Company B has staff that is diligent and loyal to the business and is not unionized, and the owner constantly praises them.
• The owner of Company B wants to be involved in every decision and process that there is in the company. The owner of Company B delegates authority to others for getting things done.
• Company B is trying to do the same old things and hoping to get different results. Company A continuously looks at the environment and changes its strategy to suit.

You take a look at the stark differences in approach between the two businesses and think about why Company A is doing better than Company B.

Company B still would not listen to anyone’s advice, and still continues to struggle, but perhaps you may learn a thing or two.

Original article: How two companies, in the same business, can be totally different.'">A Tale of Two Printers How two companies, in the same business, can be totally different.

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