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IT Benchmark Report 2003
IT Benchmark Report 2003
m e t a g r o u p . c o m
Summary of Results
To learn more about the 2003 Worldwide IT Benchmark Report or to purchase your copy, please contact META Group: Call: (800) 498-META [6382] E-mail: [email protected] Visit: www.metagroup.com/info/wwbreport03
Contents
I. The Year In Review ..................................................................... 1 II. Highlights of the 2003 Worldwide IT Benchmark Report ....... 5 III. Overview of Results ................................................................. 10
Data Collection ................................................................................................................................... 10 IT Priorities .......................................................................................................................................... 12 Outsourcing and External Consultants ......................................................................................... 14 Productivity and Support Rates ...................................................................................................... 17 Defects and Quality ........................................................................................................................... 20 Work Breakdowns .............................................................................................................................. 20 Programming Languages ................................................................................................................... 23 Process, Tools, and Techniques ......................................................................................................... 24 Development and Target Application Environments .................................................................. 28 Human Resources .............................................................................................................................. 32 Metric Usage ........................................................................................................................................ 39 Results From Project Data ............................................................................................................... 40
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I.
From terrorist attacks to corporate executive arrests, 2002 has been a year of tremendous turmoil. The effects of world events and economic recession have taken a substantial toll on both business and IT. Morale is low and confidence in the economy is shaky, making CIOs pessimistic. Just like their colleagues in the boardroom, CIOs are hesitant to make major investments in such uncertain times. In this years 2003 Worldwide IT Benchmark Report (2003 WWB), we see the effects of the economic hard times reflected in IT spending, practices, and performance. In our sample group of technology leadership companies, we have seen a very small increase in IT spending in 2002 (see Figure 1). We do not expect any significant change before the end of the year.
Figure 1 IT Budget as % of Gross Revenue: Average for All Respondents (Last 12 Months)
10%
8%
6% 3.95% 4% 4.01% 2% 3.06% 3.22% 3.31% 2.97% 3.55% 3.41% 3.30% 3.54% 3.59% 3.46% 3.21% 3.33%
0% Jul-01 Aug-01 Sep-01 Oct-01 Nov-01 Dec-01 Jan-02 Feb-02 Mar-02 Apr-02 May-02 Jun-02 Jul-02 Aug-02
Our more general sample of companies, cross-industry, shows similar results, with an average over 2002 of 3.61% (IT as a percentage of gross revenue). The projected growth to the end of the year is flat or slightly negative. The industries showing the largest negative change in IT spending since early 2001 are information technology (-22%), electronics (-13%), consumer products (-12%), and financial services (-10% see Table 1).
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Industry Information Technology Electronics Consumer Products Financial Services Construction and Engineering Transportation Energy Telecommunications Utilities Media Chemicals Metals/Natural Resources Manufacturing Retail Banking Professional Services Food and Beverage Healthcare Insurance Pharmaceuticals Hospitality and Travel Overall
CIOs are operating with limited budgets and are working to make the most out of past investments. Our results indicate an increase in spending for infrastructure, hardware purchasing, and security software, with little change or decreases in other areas. We saw a substantial jump in security software investment since September 11, and that higher level has become the norm. In November 2001, 67% of our respondents spent 0%-5% of their IT budget on security, and 33% spent 5% or more. This was a substantial increase from earlier in the year when we ran the same survey and found 82% spent 0%-5% on security, and only 18% spent more than 5%. Our most current results (see Figure 2) are similar to Novembers findings.
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5% of Budget 18%
4% of Budget 5%
3% of Budget 13%
CIOs tell us the reason spending is so tight this year is because of weak profits. A substantial number say that IT infrastructure and capacity are currently sufficient, so only limited spending is required. A smaller group points to the poor economy and anxiety over Wall Street and the corporate scandals. In general, however, there is optimism that, by the end of the year and into early 2003, investing will increase. One very positive trend this past year has been evidence of the payoff from IT spending on the bottom line of our technology leadership companies.We have long believed that commitment to IT, in both IT budgets and effective management, should translate into a companys bottom line and market value.Two years ago, to provide a tangible measure of this relationship between IT spending and market value, we started tracking an imaginary investment of $1,000,000 in a portfolio of top IT spenders among Global 2000 organizations, across several sectors. The results of the Technology Leadership Index (TLI) for the past six months are shown in Figure 3.
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10%
5%
0%
5/8/2001 6/5/2001 7/3/2001 10/9/2001 11/6/2001 10/23/2001 11/20/2001 12/4/2001 1/2/2001 3/13/2001 3/27/2001 4/10/2001 4/24/2001 5/22/2001 6/19/2001 7/17/2001 7/31/2001 8/14/2001 8/28/2001 9/11/2001 9/25/2001 12/18/2001 1/16/2001 1/30/2001 2/13/2001 2/27/2001
-5%
-10%
-15%
-20%
-25%
-30% Jan. Feb. Mar. Apr. May TLI Jun. Jul. DJIA Aug. S&P 500 Sep. Oct. Nov. Dec.
Even with all the ups and downs on Wall Street, the Technology Leadership Index companies consistently outperform those in both the S&P 500 and the Dow Jones Industrials. Sound IT investment and management have a major impact on the bottom line.
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II.
The number-one priority in the US (which is number-two worldwide) is reducing costs.With level or shrinking budgets, this is one of the only ways to have some extra funds for investment. Stability is the watchword this year. We are noticing stability in many areas in 2003 WWB.This trend could be explained by the flat IT spending during the last two years and by the lingering economic recession. The trends in work profiles (i.e., the distribution of effort in IT organizations) show an increase in both new development and package usage, with a decrease in maintenance/support. In 2002, there was a 3% increase in effort in new development, a 2% increase in package work, and a 3.7% decrease in maintenance/support.
We are seeing a slight increase in the use of consultants and external contractors in both US and non-US companies. Last year, companies spent on average 10.5% of their total IT budget on these resources. This year, 10.7% of the total IT budget is going toward outsourced personnel. During the past year, there has been an increase in outsourcing for strategy/ planning and in systems integration, with a significant decrease in application development outsourcing.
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Worldwide average new development size at 9.3 KLOCs is stable this year. The average US company supports 126 KLOCs per professional, which is a considerable jump up from 50 KLOCs per professional last year.Worldwide, we see a similar trend: last year, the support rate was 58 KLOCs per professional, and this year, it jumped up to 100.77 KLOCs. Given that portfolio size has remained stable while staff has been cut, we can see why such increases are occurring.
New development productivity was stable this year. Worldwide and US new development productivities are both around 35 KLOCs per professional per year, which is similar to last year.
In the US, we see a decrease in quality while non-US companies have improved. Defect density rates in the US this year have gone back up to the level they were at in the late 1990s. The US post-release defect rate is now 0.53 per KLOC, up from 0.31 last year.The non-US post-release defect rate is now 0.42 per KLOC, down from 0.47 last year.
C++ and Java continue to make a strong showing as the programming languages of choice this year. HTML, JavaScript, ASP, and XML are also important languages. Last year, 19.8% were developed in C++, and 15.9% were developed in Java. This year, 18% were developed in C++, and 16.8% were developed in Java. In addition, 12.7% were developed in HTML, JavaScript, ASP, or XML, up from 9.7% last year. Development productivity average for C++ in KLOCs is 4,167 LOC per month, per person. The standard for our surveys is around 25 hours per week actual coding time, which gives us 100 hours per month, and 4,167 / 100 = 41.67 LOC per hour. For Java, the average in LOC per month, per person is 6,210, giving 62.1 LOC per hour. Defects are as follows: for C++, 0.552 defect/KLOC, and for Java, 0.539 defect/KLOC.
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Metrics usage is up from last year. Last year, 51.2% of US companies used metrics, and 53.3% of non-US companies used them. This year, 58% of US companies used metrics, and 62% of non-US companies used them. Most companies that do collect metrics do so weekly. The average company has five to six people collecting metrics.
Networked workstations continue to be the tool of choice, showing the most penetration and the highest value. Fourth-generation language (4GL) tools and Unified Modeling Language (UML) showed an increase in usage over last year.
The emphasis for development effort continues to be client/server environments, with mainframe development coming in second. Not surprisingly, applications designed to run on networked workstations (which include client/server) are becoming more prominent, with mainframe-based applications continuing to decrease in the US from 33% (2000) to 31% (last year) and down to 27% this year.
Windows (particularly NT) continues to be the development platform of choice. The predominant development environment is networked workstations in the desktop Pentium class. More than half of worldwide participants are using a
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The IT work year is decreasing in length. With one of the highest priorities worldwide being the reduction of costs, it is not surprising to find a shorter working year and shorter working hours. Compensation in the US is down this year, ranging from $3,000 to $10,000 in annual salaries (dependent on position). Typically, bonus awards, merit increases, etc. have evaporated, except for hot-skill areas. In addition, with the increased supply in the job market, hiring companies can take their pick and pay lower salaries for those that they do hire. We are seeing more scrutiny on IT training spending. In the US, according to our latest benchmark data, the average number of training days reported by our respondents is 8.2, compared to 8.5 reported by our respondents last year. Worldwide, the average number of training days is 8.9, compared to 9.02 last year.
Last year was the first time that the US staffed at a higher degree level than elsewhere in the world.The trend up until last year had been the opposite.This year, nonUS companies are again staffing at a higher level, but not by much (see Table 2).
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Australia Austria Belgium Brazil Canada Chile China Colombia Costa Rica Denmark Finland France Germany Greece Hong Kong India Ireland Israel Italy Mexico Netherlands New Zealand Norway Philippines Portugal Singapore South Africa South Korea Spain Sweden Switzerland United Kingdom United States Non-US US
1.6% 0.2% 0.3% 0.8% 4.0% 0.3% 0.1% 0.1% 0.0% 0.1% 0.3% 0.9% 1.7% 0.1% 0.3% 1.6% 0.2% 0.6% 0.6% 0.5% 0.9% 0.1% 0.4% 0.9% 0.3% 0.6% 0.8% 0.6% 0.9% 0.2% 0.8% 2.8% 71.0% 29.0% 71.0% 0% 10% 20% 30% 40% 50% 60% 70% 80%
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5%
1 0%
1 5%
2 0%
2 5%
3 0%
3 5%
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84% 78%
80%
65.2%
69%
50.4% 50%
51%
47.8%
46%
33% 29%
24.8%
0% Breakdown Tools and Portfolio Size Portfolio Change Work Profile Maintenance Productivity Techniques Defect Data Life Cycle Data SEI
20%
14.0%
30%
40%
1998
1999
2000
2001
IT Priorities
No surprise here: The number-one priority is reducing costs. With stable or shrinking budgets, this is one of the only ways to have some extra funds for investment. The top five IT priorities for US companies are: 1. Reduced costs 2. Business alignment 3. Increased productivity 4. Project management 5. Improved software quality
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41% 36%
2002
38.8%
50%
60%
55.9%
63.4%
75.2% 69%
78%
100%
90.9%
12
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We are seeing a slight increase in the use of consultants and external contractors in both US and non-US companies. Last year, companies spent, on average, 10.5% of their total IT budget on these resources. This year, 10.7% of the total IT budget is going toward outsourced personnel.With the spending cutbacks we have experienced during the past two years, it is not surprising there is little change in this area. During the past year, there has been an increase in outsourcing in strategy/planning and systems integration. Our results indicate a significant decrease in application development. A possible explanation for this is that, with the cutbacks in staff, there has been a corresponding cutback in software development and production. It is not unusual for IT organizations to focus on internal reorganization and strategy, as opposed to creating new products during difficult times. The use of packaged solutions continues to rise significantly. Last year, 31.37% of portfolios, on average, consisted of packaged software. This year, we are up to 43.78% (see Figure 7).
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In terms of packages being used in development work, the percentage for US companies has decreased from 41.4% to 40.2%; in non-US companies, 45.9% of development work consists of packaged software, up from 42.4% last year (see Figures 8 and 9).
43.1% 34.8%
41.4%
40.2%
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The amount of new development being done by external contractors and outsource providers has remained stable for two years now, after a decrease in early 2001. The number of contractors declined in 2001 and appears to have leveled off. Last year, the worldwide percentage was 35.4%, but this year, it increased slightly to 35.9% (see Figure 10).
Figure 10 Average % of New Development Software Developed by External Contractors/Outsource Providers: All Participants
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 1999 2000 2001 2002 46.6% 38.5% 35.4% 35.9%
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Data Center
Help Desk
All US Non-US
Application Maintenance
Single Application
Business Process
0.0%
Worldwide average new development size (KLOC) is stable this year too.There was a significant jump last year, which we see maintained this year (see Figure 13).We reported in last years analysis that the introduction of powerful development tools in recent years, and the explosion of Web-based applications, resulted in more code being written than ever before.
Figure 13 Average New Development Size (KLOC): All Participants
10,000 8,000 6,000 4,000 2,000 0 1999 2000 2001 2002 9,200 9,300
5,100 3,400
The average US company supports 126 KLOCs per professional, which is a considerable jump up from 50 KLOCs per professional last year. Worldwide, we see a similar trend: last year, the support rate was 58 KLOCs per professional, and this year, it jumped up to 100.77 KLOCs (see Figures 14 and 15). Given that portfolio size has remained stable while staff has been cut, we can see why such increases are occurring.
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20,000 18,000 16,000 Thousands of KLOCs 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 1 21 41 61 81 Maintenance Staff
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In the US, we see a decrease in quality, while non-US companies have improved. Defect density rates in the US this year have gone up to the level they were at in the late 1990s, making 2001 an unusual year.A possible explanation for this is the higher-than-usual number of IT companies that provided data for last years WWB. Their defect rates are significantly lower than our usual set of companies.
Work Breakdowns
In what phases do IT professionals spend most of their time (see Table 5)?
Table 5 Percentage of Life Cycle Effort: All Respondents
1997 Definition Analysis Design Coding System/Integration Test Acceptance Test Documentation Implementation Support 16.1 17.7 32.2 17.5 7.2 9.4 1998 16.7 17.2 32.5 17.4 7 9.3 1999 17.8 16.3 31.8 17.2 6.6 10.1 2000 17.6 16.5 32.2 17.3 7.1 9.3 2001 6.4 19.7 17.1 27.0 17.2 4.8 5.9 13.1 5.8 2002 10.0 13.1 15.8 23.0 10.3 6.7 5.4 7.1 8.5
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Migration 12%
In the US, the emphasis in maintenance and support work is on fixes and repairs (24%), with an even distribution among new functionality (19%), upgrades (19%), and improvements (18% see Figure 17).
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Fixes/Repairs 24%
In non-US companies, the emphasis is on fixes and repairs (27%), with less emphasis on upgrades (see Figure 18).
Fixes/Repairs 27%
Upgrades 16%
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18% 16% 14% 12% 10% 6.7% 7.0% 5.6% 8% 6% 4% 2% 0% 4GL Ada C
14.2%
11.6%
20%
3.7%
3.9% 3.1%
3.4%
0.7% 0.4%
0.6%
C++
COBOL
Oracle Perl/CGI
SAP
2.6% SQL
6.1% 6.4%
All
US
Non-US
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30%
20%
10%
60%
10%
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80% 70% 60% 50% 40% 30% 20% 10% 0% Certified 1999 2000 21% 20% 21%
25%
A possible explanation for this decrease in interest in SEI assessments could be the need to reduce costs (which is a top-five priority for both US and non-US companies) and staffing cutbacks. It takes time and money to perform assessments. The increase in ISO 9000 certified companies may be related to our sample of companies this year, which has a larger-than-usual proportion of electronics and telecomm companies. The majority of our respondents are at SEI Level 2 (see Figure 23). This is the first year we have a majority of companies above Level 1. We are also seeing more and more companies in the upper levels.
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Level 5
Level 4
Level 3
US Non-US
Level 2
Level 1
0.0%
With the emphasis on object-oriented and Web technologies, we see some trends in tool usage from last year. Figures 24 and 25 show the percentage of respondents using a particular tool, as well as the value rating they place on each tool.
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30%
40%
50%
60%
70%
80%
90%
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1.3% 0.9%
1.6%
1.3% 0.0%
All
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2.1%
Non-US
28
31.8%
31.3%
31.2%
30.6%
30%
25%
18.3% 18.4% 18.2%
20%
15%
9.4% 9.4% 9.1%
6.1%
6.0%
10%
6.8%
2.5%
2.6%
0% HP-UX IBM AIX IBM MVS IBM OS/400 Microsoft Windows 95+ All US Microsoft Windows NT Non-US Sun Solaris
The application operating environment is mostly client/server, with mainframe applications coming in second (see Figure 28). Not surprisingly, applications designed to run on networked workstations (which include client/server) are becoming more prominent, with mainframe-based applications continuing to decrease in the US from 33% (2000) to 31% (last year) and down to 27% this year.
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1.8%
2.1%
5%
2.3%
30.3%
35%
31.8%
29
35%
30%
25%
20.2% 19.4% 19.1% 21.2%
20%
15%
10%
5%
0% Mainframe Apps or Products PC/Workstation Apps or Products Client/Server Apps Systems/ Network Products Non-US Other
All
US
With this focus on networked workstations, it is not surprising that the primary internal communication is e-mail (see Figure 29), with 80.8% of companies worldwide using it. This is a 22.6% increase in two years.
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30
60%
50%
40%
30%
20%
14.2%
18.6%
11.6% 10% 6.2% 3.3% 0% All E-Mail All E-Mail/Voice US Voice 1.6% 1.3% 2.1% 0.3% 0.5% Fax/E-Mail Non-US Not Available
Worldwide, companies anticipate large growth in network bandwidth, server, and storage capacities. Again, the focus on networked and distributed computing is evident (see Figure 30).
Figure 30 % Increase Anticipated Next Year
45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Storage Capacity All Network Bandwidth US Server Capacity Non-US
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31
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In those organizations that are hiring, it is easiest to acquire systems and network analysts in the US, and most difficult to acquire metrics and testing personnel (see Table 6).
Table 6 US Ranking: Ease of Acquisition 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Systems Analyst Network Analyst/Architect Web Specialist/Designer Systems Designer/Architect Systems Administrator Development Programmer Database Analyst Documentation/Training Project Leader Support Programmer Business Analyst QA Specialist Metrics/Process Specialist Test Engineer
The ease in finding Web and network experts might reflect the availability of staff laid off due to Internet-based company failures. The difficulty in finding metrics people is a supply/demand issue. Little demand for metrics people creates a small supply.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14
Documentation/Training Support Programmer Database Analyst Metrics/Process Specialist Web Specialist/Designer QA Specialist Test Engineer Systems Designer/Architect Network Analyst/Architect Systems Administrator Project Leader Development Programmer Business Analyst Systems Analyst
Turnover rates remain significant in both the US and worldwide (see Table 8).
Table 8 Annual Turnover Rates
All 1998 10.7% US 1998 10.1% Non-US 1998 11.4% 1999 9.0% 2000 12.6% 2001 11.4% 2002 11.7% 1999 8.0% 2000 10.2% 2001 9.9% 2002 11.8% 1999 9.0% 2000 11.4% 2001 10.6% 2002 11.8%
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38% No
Yes 62%
According to the Global Technology Index (http://www.metricnet.com/specials/GNEImain.html), Chiles high turnover rate may relate to its high marks in the knowledge jobs category, ranking 12th of 52 countries. Knowledge jobs are positions that tend to be informationand/or engineering-related, and require a need for qualified senior management. The job market in Chile is booming, unlike other areas of the world. India has always had a high turnover rate (it was number one in 2001 and number two in 1999). India has sufficient IT resources, but it has trouble holding on to them due to its serious social and economic problems.
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Compensation in the US is down this year, ranging from $3,000 to $10,000 in annual salaries, depending on position. Typically, bonus awards, merit increases, etc. have evaporated, except for hot-skill areas. In addition, with the increased supply in the job market, hiring companies can take their pick and pay lower salaries for those that they do hire. We are seeing more scrutiny on IT training spending (see Table 11).
Table 11 Training Days Per Year
2001
9.0 8.5 9.6
2000
8.4 8.0 8.7
1999
7.25 7.3 7.2
1998
7.9 7.4 8.4
Training days vary somewhat by job title (see Figure 33). As we would expect this year, network-related positions and programmers are getting the most training.
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13.9
14.0
13.2
10.8
12.1
10.2
10.1 9.5
10.7
9.7
9.8
10.0
9.2 8.3
9.2 8.7
9.0
8.8
8.3 7.4
8.6 7.8
8.9
9.2
7.5
7.8
Documentation/Training
Support Programmer
All
US
Non-US
Turning now to the distribution of staff across the 14 job titles in our study (see Figure 34), we see the majority of IT resources consist of development programmers (19.9% worldwide). This is slightly down from last year, when 21.9% of IT resources were development programmers. Next in line come the systems analysts.
Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
Web Specialist/Designer
Network Analyst/Architect
Business Analyst
Systems Designer/Architect
Database Analyst
Systems Analyst
Metrics/Process Specialist
Project Leader
Test Engineer
Development Programmer
QA Specialist
12.7
37
20%
15%
11.3% 12.4% 7.2% 8.0% 4.8% 6.9% 8.0% 5.6% 5.0% 5.5% 4.1% 4.0% 4.7% 2.9% 3.9% 4.4% 3.0% 6.7% 6.8% 6.5% Documentation/Training Non-US Systems Administrator Web Specialist/Designer Database Analyst Metrics/Process Specialist Test Engineer QA Specialist 8.6%
10%
5%
0% Support Programmer Systems Designer/Architect Business Analyst Network Analyst/Architect US Systems Analyst Project Leader Development Programmer
All
The educational background of IT professionals is summarized Table 12. Last year was the first time that the US staffed at a higher degree level than elsewhere in the world.The trend up until last year had been the opposite.This year, non-US companies are staffing at a higher level, but not by much.
Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
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63%
42% 37%
All
US
Non-US
Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
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Metrics usage is up from last year. Last year, 51.2% of US companies used metrics, and 53.3% of non-US companies used them. This year, 58% of US companies used metrics, and 62% of non-US companies used them. Most companies that do collect metrics do so weekly. The average company has five to six people collecting metrics.
Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
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Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
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For more information about the Worldwide IT Benchmark Report or META Groups complete portfolio of measurement solutions, visit us on the Web at www.metagroup.com or call (800) 945 META [6382].
Copyright 2002 META Group, Inc. All rights reserved. 208 Harbor Drive, Stamford, CT 06912-0061 (800) 498-META [6382] (203) 973-6700 [email protected] www.metagroup.com
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