Damn lies, statistics and benchmarking

The recently published NCC Benchmark of IT Spending andStrategy 2011 shows a decline in spending on IT by UK organisations.

According to the survey:

 ‘The median level of total IT spending in this year’s Survey is £3,135 per end user, compared to £3,227 in 2009 and £3,275 in 2008. Expressed as a percentage of turnover/revenue the median IT spending figure represents just 2.48% of expenditure, down slightly from 2009 when it was 2.54%. There are significant variances between sectors however; a quarter of respondents reported an end user spending figure of less than £2,096, whilst at the other extreme a quarter of respondents reported a figure higher than £5,152.’

The lowest spending sectors are charities with a median spend of £2,123 spent per end user and education, with a median spend of £2,264 per end user, while Finance is the highest at £9,348 per end user.

The problem with these figures, is what should we make of them? On one level, they hold no surprises. Times are tough, organisations cut/avoid expenditure where they can. In many charities especially, IT is seen as a back office cost and trimming its budget is much less publically painful than things on the front line.

Another interpretation is that the cost effectiveness of the technology is improving and therefore cost per end user is falling. One of the reasons for charities being at the lower end of the scale, under this scenario, is that charities benefit from generous discounts and donations from suppliers (see the CTX programme for examples).

A third, and possibly more significant reason, is that charities simply don’t see the benefits of technology investment beyond the very basics (accounting software, basic office functionality etc.). I don’t think they’re alone in this, and I certainly wouldn’t want to see the technology arms race that goes on in the finance sector transferred to the not-for-profit arena. However, it’s clear to me in the many conversations that I have with charities, that few in the sector really understand what technology could do for them. Moreover, when they do see examples of good technology use, it is from the very large charities whose spend on IT is probably greater than most charities’ total income.

Yet good technology is more affordable now than ever. We need to open charities eyes to what is possible and affordable. That may mean total IT spend going up but it should be linked to more effective services, better fundraising, clearer tracking and communication of benefits, and in some cases it could revolutionise the way charities work.

So we need more case studies and examples of small charities doing great things with technology and less of the flagship names, then the vast majority of the sector may come to realise just what IT can do for them.