IT Benchmark Report 2003

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2003 Worldwide

IT Benchmark Report

To learn more about the 2003 Worldwide IT Benchmark Report or to purchaseyour copy, please contact META Group:

Call: (800) 498-META [6382]

E-mail: [email protected]

Visit: www.metagroup.com/info/wwbreport03

Summary of Results
mailto:[email protected]:[email protected]:[email protected]


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2003 Worldwide IT Benchmark Report

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

Contents

I. The Year In Review ..................................................................... 1

II. Highlights of the 2003 Worldwide IT Benchmark Report....... 5

III. Overview of Results ................................................................. 10Data 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. The Year In Review

From terrorist attacks to corporate executive arrests, 2002 has been a year of tremen-

dous turmoil. The effects of world events and economic recession have taken a substan-

tial 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 theend of the year.

Figure 1 IT Budget as % of Gross Revenue: Average for All Respondents

(Last 12 Months)

3.06%

3.21%

3.33%3.30%

3.46%

3.55%

3.59%

3.41%

3.95%

4.01%

3.31%

3.22%

2.97%3.54%

0%

2%

4%

6%

8%

10%

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%), elec-tronics (-13%), consumer products (-12%), and financial services (-10% see Table 1).


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Table 1 IT Spending by Industry

Industry

Average of IT Spending

Change in $ 2001-2002

Information Technology -22.22%

Electronics -13.56%

Consumer Products -12.19%

Financial Services -10.94%

Construction and Engineering -7.49%

Transportation -7.28%

Energy -5.47%

Telecommunications -4.38%

Utilities -4.00%

Media -2.44%

Chemicals -2.05%

Metals/Natural Resources -1.31%

Manufacturing -1.20%

Retail -0.09%

Banking 0.25%

Professional Services 1.32%

Food and Beverage 1.72%

Healthcare 2.62%

Insurance 3.39%

Pharmaceuticals 6.54%

Hospitality and Travel 10.04%

Overall -3.08%

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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Figure 2 What % of Your IT Budget Is Dedicated to Security?

Less Than 1%24%

1%-2% of Budget17%

3% of Budget13%

4% of Budget5%

5% of Budget18%

6%-10% of Budget15%

More Than 10%8%

CIOs tell us the reason spending is so tight this year is because of weak profits. A sub-

stantial 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 organiza-

tions, 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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Figure 3 Technology Leadership Index vs. DJIA and S&P 500: (Jan.-Dec.)

-30%

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

1/2/2001

1/16/2001

1/30/2001

2/13/2001

2/27/2001

3/13/2001

3/27/2001

4/10/2001

4/24/2001

5/8/2001

5/22/2001

6/5/2001

6/19/2001

7/3/2001

7/17/2001

7/31/2001

8/14/2001

8/28/2001

9/11/2001

9/25/2001

10/9/2001

10/23/2001

11/6/2001

11/20/2001

12/4/2001

12/18/2001

TLI DJIA S&P 500

Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec.

Even with all the ups and downs on Wall Street, the Technology Leadership Index compa-

nies 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. Highlights of the 2003 Worldwide IT

Benchmark Report IT spending (as a percent of gross revenue) has remained relatively stable through

2001 and most of 2002.

Spending has increased in infrastructure development, hardware purchasing, and

security software.

The biggest cutbacks have been in staffing.

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 mainte-

nance/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 de-

velopment outsourcing.


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What are companies outsourcing?

17.4% of participants have outsourced their data centers. 46.4% have outsourced some application development.

10.1% have outsourced their help desks.

17.4% have outsourced some maintenance work.

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 con-

siderable 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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Software process assessments have dipped in US companies and have remained at a

stable level in non-US companies. ISO 9000 certification was up in both US and non-

US companies.

Last year, 43.8% of US companies and 41.0% of non-US companies had done

formal assessments. This year, 38% of US companies and 41.2% of non-US com-

panies have done formal assessments.

Last year, 16.2% of US companies and 32.67% of non-US companies had been

ISO 9000 certified. This year, 21.6% of US companies and 33.2% of non-US com-

panies have gone through the process.

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 pen-

etration 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 ap-

plications 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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Windows-based operating system on these computers, with a strong showing

of IBM MVS. Sun Solaris has also increased from last year. We have encountered

these same findings for four years now.

Metrics specialists and analysts are the most difficult positions to fill worldwide.

Turnover rates for IT staff remain significant in both the US and worldwide.

US turnover is at 11.8%, up from 9.9% last year.

Worldwide turnover is at 11.8%, up from 10.6% last year.

The country with the highest turnover rate is Chile.

Canada and the Netherlands have the lowest turnover rates.

These higher-than-expected turnover rates in the context of the economic slow-

down or recession are partly explained by an exodus of workers from IT to

other areas.

The IT work year is decreasing in length. With one of the highest priorities world-

wide 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. haveevaporated, 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 train-

ing 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 else-

where in the world. The trend up until last year had been the opposite. This year, non-

US companies are again staffing at a higher level, but not by much (see Table 2).


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Table 2 Percentage of Workforce at Education/Training Level

US Non-USPh.D. 8.3% 3.7%Masters 13.4% 21.29%Bachelors 40.7% 37.6%Tech School 19.7% 21.7%No Formal 17.9% 15.72%


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III. Overview of Results

Data Collection

Data was collected via survey from 34 countries and more than 24 industry sectors. This

data was combined with other sources, including the Worldwide Benchmark database,

which contains detailed, quantitative survey data collected on an ongoing basis from a

panel of more than 25,000 IT professionals. The greatest response came from the US

(71%), with Canada coming in second (see Figure 4).

Figure 4 Participant Distribution

71.0%29.0%

71.0%2.8%

0.8%0.2%0.9%0.6%0.8%0.6%0.3%0.9%

0.4%0.1%

0.9%0.5%0.6%0.6%

0.2%1.6%

0.3%0.1%

1.7%0.9%

0.3%0.1%0.0%0.1%0.1%0.3%

4.0%0.8%0.3%0.2%

1.6%

0% 10% 20% 30% 40% 50% 60% 70% 80%

USNon-US

United StatesUnited Kingdom

SwitzerlandSweden

SpainSouth KoreaSouth Africa

SingaporePortugal

PhilippinesNorway

New ZealandNetherlands

MexicoItalyIsrael

IrelandIndia

Hong KongGreece

GermanyFranceFinland

DenmarkCosta Rica

ColombiaChinaChile

CanadaBrazil

BelgiumAustria

Australia


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We received the most responses from information technology, professional services,

and government (see Figure 5).

Figure 5 Distribution of Participants by Industry

4.6%

2 . 4 %

0 . 7 %

1 . 2 %

1 . 0 %

0.8%

2 . 4 %

1 . 0 %

6.4%

0 . 7 %

7 . 8 %

3 . 3 %

3 1 . 3 %

4 . 1 %

5.4%

1.7%

0 . 3 %

5 . 3 %

1 . 5 %

8.9%

1.2%

3 . 5 %

1.7%

2 . 6 %

0% 5% 1 0% 1 5% 2 0% 2 5% 3 0% 3 5%

Aerospace

Banking

Chemicals

Construction and Engineering

Consumer Products

Defense

Education

Electronics

Financial ServicesFood/Beverage Processing

Government

Healthcare

Information Technology

Insurance

Manufacturing

Media

Metal/Natural Resources

Miscellaneous

Pharmaceuticals

Professional Services

Retail

Telecommunications

TransportationUtilities


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Most respondents provided us with tools and techniques, software process, and life-

cycle data. Data was most scarce in the areas of portfolio and defects (see Figure 6).

Figure 6 Percent of Participants With Data

0%

20%

40%

60%

80%

100%

120%

WorkProfile

Maintenance

Breakdown

LifeCycle

PortfolioSize

Por

tfolioChange

Productivity

Data

DefectData

SEI

Toolsand

Techniques

1998 1999 2000 2001 2002

47.8%

76.4%

86.3%

65.2%

46.6%

24.8%

8.1%

55.9

% 63.4%

90.9%

76.9% 8

4.3%

50.4%

40.5%

14.0%

11.6%

38.8%

75.2%8

4%

70%

80%

50%

50%

30%

13%

50%

69%

78%

78%

93%

33%

32%

51%

41%

93%

88%

69%

69%

82%

29%

29%

46%

36%

83%

78%

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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This is the first time that business alignment has appeared in the top five IT priorities. Is

business alignment perceived as more important during hard financial times than during

an upswing? If a company is struggling, all its resources are called on to help it survive.During good times, business is booming and appears to be self-sufficient, so IT can work

on its own goals. Business alignment should always be a high priority for IT. Hopefully, the

groundwork for closer business relationships will be laid this year and will be maintained

in the years to come.

The lowest priorities in US companies are recruiting staff and business process re-

engineering. Many IT organizations have reduced staff during the past year. The ITAA

workforce study (http://www.itaa.org/workforce/studies/02execsumm.pdf) revealed that

the US IT workforce experienced a net loss of more than 500,000 workers during a 12-

month period. Companies hired 2.1 million IT workers during the year, but also dis-

missed 2.6 million IT workers. This was not a good year to be looking for a new IT

position.

The primary IT priorities for non-US companies are:

1. Increased productivity

2. Reduced costs

3. Business alignment

4. Improved software process

5. Improved software quality

As in the US, cost reduction is an important priority, but it is second to increasing

productivity. These two factors often appear together, because an increase in productiv-

ity often does help to reduce costs.

The lowest priorities for non-US companies are the same as in the US: recruiting staff

and business process re-engineering (BPR). BPR has been a low priority for several years

now. It was an important tool in the early and mid-1990s, but has since lost favor. BPR still

holds promise for understanding business processes and their subtle interrelationships;

however, it can be a complex undertaking, and the learning curve can be long for imple-

menting it.


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Outsourcing and External Consultants

IT organizations often use external resources to augment and sometimes replace inter-nal resources. Such external resources include consultants, contractors, packaged solu-

tions, and outsource providers.

The average results for the past two years appear in Table 3:

Table 3 Average Results

22.1%26.9%19.9%17.1%14%2002: All

23.6%35.2%13.7%13.5%14%2001: All

SystemsMaintenance

ApplicationDevelopment

SystemsIntegration

IT Strategy andPlanning

Re-Engineering/PerformanceImprovement

% of TotalConsulting

Spend

22.1%26.9%19.9%17.1%14%2002: All

23.6%35.2%13.7%13.5%14%2001: All

SystemsMaintenance

ApplicationDevelopment

SystemsIntegration

IT Strategy andPlanning

Re-Engineering/PerformanceImprovement

% of TotalConsulting

Spend

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 develop-

ment. 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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Figure 7 Average % of Portfolio Consisting of Packaged Software:

All Participants

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

31.37%

43.78%

32.18%

22.27%

1999 2000 2001 2002

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).

Figure 8 Average % of New Development Consisting of Packaged Software: US

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

22%

43.1%

34.8%

41.4% 40.2%

1998 1999 2000 2001 2002


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Figure 9 Average % of New Development Consisting of Packaged SW: Non-US

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

42.1%

52.2%

41.5% 42.4%45.9%

1998 1999 2000 2001 2002

The amount of new development being done by external contractors and outsource pro-

viders 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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

46.6%

38.5%35.4% 35.9%

1999 2000 2001 2002


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Outsourcing continues to play a significant role, particularly in application development.

This is the third year we have seen a trend toward application development outsourcing.

In earlier years, the focus was on data center and operations (see Figure 11).

Figure 11 Percent of Participants Outsourcing Each

14.8%

22.2%

8.6%

14.8%

17.3%

14.8%

7.4%

17.2%

20.7%

10.3%

12.1%

17.2%

15.5%

6.9%

8.7%

26.1%

4.3%

21.7%

17.4%

13.0%

8.7%

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

Data Center

Application

Development

Help Desk

Network

Management

Application

Maintenance

Single Application

Business Process

All

US

Non-US

Productivity and Support Rates

New development productivity is normally measured in line-of-code (LOC) production rates

or function points. For three years now, we have received very little function point data. By far,

the majority of our respondents report only LOCs. Function points are more difficult and time-

consuming to count than LOCs. Until we see more interest in the advantages of using meaning-

ful size and productivity measures, LOCs will probably continue to be the norm.

New development productivity was stable this year. Worldwide and US new develop-

ment productivities are both around 35 KLOCs per professional per year (see Figure

12), which is similar to last 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 the

lingering economic recession.


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Figure 12 Average New Development Productivity

(KLOC/Professional per Year)

1

50

100

150

200

250220.78 220.78

77.78

34.14

37.51

26.08

All US Non-US

Maximum

0

10

20

30

40

50

60

70

80

90

Average

Worldwide average new development size (KLOC) is stable this year too. There was a signifi-

cant 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

0

2,000

4,000

6,000

8,000

10,0009,200 9,300

3,400

5,100

1999 2000 2001 2002

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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Figure 14 Portfolio Size (KLOC) Versus Maintenance Staff: US Participants

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0 10 20 30 40 50 60 70 80 90 100

Maintenance Staff

ThousandsofKLOCs

Figure 15 Portfolio Size (KLOC) Versus Maintenance Staff: All Participants

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

1 21 41 61 81

Maintenance Staff

ThousandsofKLOCs


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Defects and Quality

The measure we use to quantify quality is defects per KLOC (see Table 4).

Table 4 Post-Release Defects per KLOC

All

1998 1999 2000 2001 2002

0.48 0.47 0.47 0.36 0.46

US

1998 1999 2000 2001 2002

0.57 0.51 0.54 0.37 0.53

Non-US

1998 1999 2000 2001 2002

0.46 0.48 0.47 0.47 0.42

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 num-

ber 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 1998 1999 2000 2001 2002

Definition 6.4 10.0

Analysis 16.1 16.7 17.8 17.6 19.7 13.1

Design 17.7 17.2 16.3 16.5 17.1 15.8

Coding 32.2 32.5 31.8 32.2 27.0 23.0

System/Integration Test 17.5 17.4 17.2 17.3 17.2 10.3

Acceptance Test 4.8 6.7

Documentation 7.2 7 6.6 7.1 5.9 5.4

Implementation 9.4 9.3 10.1 9.3 13.1 7.1

Support 5.8 8.5


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(Note: In 2001, we began collecting data on three new phases: Definition, Acceptance

Test, and Support. Data for these phases was not available in previous years.)

This year, we continue to see a decrease in the amount of time spent coding and an

increase in the earlier phases of the life cycle, which is a good trend. The more time spent

in the upfront activities almost always results in a shortened life cycle for the project.

What kinds of projects are being done? The worldwide focus is on new development

(32%) and maintenance (26%). Package work is on the rise at 30% for package installation

and modification, up from 28% last year (see Figure 16).

Figure 16 Current Work Breakdown: All Participants

NewDevelopment

PackageInstallationMigration

PackageModification

Maintenance

32%

17%12%

13%

26%

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 improve-

ments (18% see Figure 17).


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Figure 17 Current Maintenance/Support Breakdown: US

24%

20%

19%

18%

19%Fixes/Repairs

NewFunctionality

Improvements

Upgrades

Other

In non-US companies, the emphasis is on fixes and repairs (27%), with less emphasis on

upgrades (see Figure 18).

Figure 18 Current Maintenance/Support Breakdown: Non-US

27%

19%

19%

16%

19% Fixes/Repairs

NewFunctionality

Improvements

Upgrades

Other


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23



Programming Languages

For two years now, we have seen an increase in the use of C++ and Java in our reportingcompanies, though less in the US than worldwide. Web programming languages are also

popular. In the US, we see a much larger usage of COBOL than elsewhere in the world.

During the last three years, COBOL usage has leveled off at about 11.5% in US compa-

nies, but has decreased significantly in non-US companies. Y2K provided the opportunity

to move to new languages, but it appears US companies took less advantage of this than

non-US companies. Visual Basic and Oracle/SQL-based languages are also making a strong

showing (see Figure 19).

Figure 19 Language Use Summary Composition

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

4GL Ada C C++ COBOL HTML/JavaScript/ASP/XML

Java Oracle Perl/CGI SAP SQL VisualBasic

Other

All US Non-US

18.4%

6.7%

0.6%

0.7%

18.0%

3.9%

13.6%

16.7%

6.7%

2.1%

6.1%

6.0%

9.8%

9.2%

7.0%

0.4%

3.1%

13.5%

17.4%

6.5%

2.2%

6.4%

5.9%

9.7%

9.5%

3.7%

5.6%

3.4

%

14.2%

11.6%

13.9%

10.9%

7.9%

1.9%

2.6%

6.7%

10.5%

7.1%


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24



Process, Tools, and Techniques

Software process assessments have dipped in US companies, and remained at a stablelevel in non-US companies (see Figures 20 and 21).

Figure 20 Formal Assessment Performed (SEI): US % Responding Yes

1999 2000 2001 2002

0%

10%

20%

30%

40%

50%

60%

70%

42%

58%

35%

65%

56%

38%

62%

44%

Yes No

Figure 21 Formal Assessment Performed (SEI): Non-US % Responding Yes

0%

10%

20%

30%

40%

50%

60%

70%

42%

58%

32%

68%

59%

41%

59%

41%

Yes No

1999 2000 2001 2002


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25



The majority of assessments that were performed took place in the aerospace and

telecommunications sectors. ISO 9000 certification is up in both US and non-US compa-

nies (see Figure 22).

Figure 22 ISO 9000 Certification (% of Participants): All Participants

79% 80% 79%

25%

75%

21% 20% 21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Certified Not Certified

1999 2000 2001 2002

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 yearwe have a majority of companies above Level 1. We are also seeing more and more

companies in the upper levels.


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26



Figure 23 SEI Results: % of Those Responding

42.7%

20.9%

10.9%

4.5%

26.5%

41.2%

17.6%

11.8%

18.4%

43.4%

22.4%

10.5%

5.3%2.9%

20.9%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0%

Level 1

Level 2

Level 3

Level 4

Level 5

All

US

Non-US

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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27



Figure 24 Tool and Technique Usage: Percent Using (All Participants)

51.6%31.9%

29.6%

39.6%

42.0%

42.6%

50.1%

40.9%

47.8%

30.1%

37.5%

26.2%

45.6%

50.8%

82.3%

49.1%

32.7%

55.6%

24.9%

31.8%

43.9%

35.1%

39.1%

37.7%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

MethodologyDesign Automation

Code Generators

Reuse of Code

Reuse of Design

Object-Oriented Tools

SW QA Group

Process Group

Walk-Throughs/Inspections

Test Data Generators

Software Metrics

Estimation Tools

Project Management Tools

Client/Server Development

Networked Workstations

Structured Methods

Information Engineering

4GL Tools

Process Simulation

Business Process Re-Engineering

Data Modeling

UML

XML

Component Code

Figure 25 Tool and Technique Usage: Value Rating (All Participants)

3.6

2.9

2.7

3.6

3.5

3.4

3.5

3.1

3.4

3.1

3.1

2.5

3.3

3.4

3.9

3.42.8

3.9

2.5

3.1

3.6

3.0

3.6

2.9

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5

Methodology

Design Automation

Code Generators

Reuse of Code

Reuse of Design

Object-Oriented Tools

SW QA Group

Process Group

Walk-Throughs/Inspections

Test Data Generators

Software Metrics

Estimation Tools

Project Management Tools

Client/Server Development

Networked Workstations

Structured MethodsInformation Engineering

4GL Tools

Process Simulation

Business Process Reengineering

Data Modeling

UML

XML

Component Code


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28



As we have seen for several years now, the most popular tool is the networked work-

station, with a penetration of 82.3% and the highest value rating of 3.9 (on a scale of 0 to

5). Next are 4GL tools, with a penetration of 55.6% and a value rating of 3.9. In compari-son to last years tool usage, we see a growth in interest in UML and object-oriented

development.

Development and Target Application Environments

In this section, we review the findings on both development environments and the envi-

ronments where applications are designed to run. The predominant development envi-

ronment is networked workstations in the desktop Pentium class (see Figure 26). More

than half of worldwide participants are using a Windows-based operating system on

these computers (see Figure 27), with a strong showing of IBM MVS. Sun Solaris has also

increased from last year. We have encountered these same findings for four years now.

Figure 26 Application Development Hardware Platforms

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

DesktopPentium

Class

IBM VAX Servers(Unix)

Mainframe Laptops

All US Non-US

78.6

%

4.0

%

4.3

%

1.3

%

1.3

% 10.4

%

89.3

%

1.8

%

1.8

%

0.9

%

0.0

% 6.3

%

72.2

%

5.3

%

5.9

%

1.6

%

2.1

%1

2.8

%


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29



Figure 27 Application Development Software Platforms

0%

5%

10%

15%

20%

25%

30%

35%

95+ NT

6.1%

2.5%

18.3%

1.8%

31.3%

30.6%

9.4%

6.0%

2.6%

18.4%

2.1%

31.2%

30.3%

9.4%

6

.8%

2.3%

18.2%

31.8%

31.8%

9.1%

HP-UX IBM AIX IBM MVS IBM OS/400 MicrosoftWindows

MicrosoftWindows

Sun Solaris

All US Non-US

The application operating environment is mostly client/server, with mainframe applica-

tions 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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30



Figure 28 Distribution of Development Effort (Percent)

0%

5%

10%

15%

20%

25%

30%

35%

28.4%27.9%

29.9%

19.4%19.1%

20.2%

33.5%33.4%

33.8%

26.7%25.8%

28.8%28.1%

30.9%

21.2%

MainframeApps orProducts

PC/WorkstationApps or Products

Client/ServerApps

Systems/NetworkProducts

Other

All US Non-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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31



Figure 29 Primary Internal Communication

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

3.3%

80.8%

14.2%

1.3%0.3%

1.6%

84.1%

11.6%

2.1% 0.5%

6.2%

18.6%

75.2%

All E-Mail E-Mail/Voice Voice Fax/E-Mail Not Available

All US Non-US

Worldwide, companies anticipate large growth in network bandwidth, server, and stor-

age capacities. Again, the focus on networked and distributed computing is evident (see

Figure 30).

Figure 30 % Increase Anticipated Next Year

0%

5%

10%

15%20%

25%

30%

35%

40%

45%

StorageCapacity

NetworkBandwidth

ServerCapacity

All US Non-US


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32



Human Resources

In early 2002, we ran a series of surveys to determine if companies were cutting IT staff,

and to what extent. Of our respondents, 47.6% said they had cut staff, with the majority

making cuts of 10%-15%. Our findings agreed with some of the results of the ITAA annual

workforce report released in May 2002. The most important findings in the ITAA report

were:

The 10.4 million-member IT workforce that ITAA measured in 2001 fell by 5% to 9.9

million workers in early 2002. In aggregate terms, the US IT workforce experienced

a net loss of 528,496 workers during a 12-month period. Companies hired 2.1 million

IT workers during the year, but also dismissed 2.6 million IT workers.

IT firms lost 15% of IT workers, while non-IT companies dropped 4% during the

same period.

Despite the grim numbers, hiring managers in the ITAAs survey said they expect to

create about 1.1 million IT jobs within the next year. But due to a so-called skill

imbalance, they expect about 600,000 of those jobs to remain unfilled.

(ITAA Executive Summary, Bouncing Back: Jobs, Skills and the Continuing Demand for IT

Workers, http://www.itaa.org/workforce/studies/02execsumm.pdf.)

The ITAA report sparked considerable controversy. One factor fueling the conflict over

the study was that the ITAA is one of the nations biggest supporters of the H-1B tempo-rary foreign visa program. Some critics charged that the skill shortage reported in the

ITAA study was just an attempt to persuade Congress to raise the H-1B cap and flood

the IT job market with lower-paid foreigners to drive down salaries.

We conducted our own surveys to see if our member companies were experiencing a

skill shortage. The results are in Figure 31. In general, our respondents do not agree with

the ITAA finding that there is a skill shortage.


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33



Figure 31 Are You Experiencing a Skill Shortage in Your IT Organization?

Somewhat

62%

22%

16%

Not at All

Yes

In those organizations that are hiring, it is easiest to acquire systems and network ana-

lysts in the US, and most difficult to acquire metrics and testing personnel (see Table 6).

Table 6 US Ranking: Ease of Acquisition

1 Systems Analyst

2 Network Analyst/Architect

3 Web Specialist/Designer

4 Systems Designer/Architect

5 Systems Administrator

6 Development Programmer

7 Database Analyst

8 Documentation/Training

9 Project Leader

10 Support Programmer

11 Business Analyst

12 QA Specialist

13 Metrics/Process Specialist14 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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34



In non-US companies, the rankings are consistent with last years findings. Database ana-

lysts and support programmers are easy to find, and analysts are most difficult to find

(see Table 7).

Table 7 Non-US Ranking: Ease of Acquisition

1 Documentation/Training

2 Support Programmer

3 Database Analyst

4 Metrics/Process Specialist

5 Web Specialist/Designer

6 QA Specialist

7 Test Engineer

8 Systems Designer/Architect9 Network Analyst/Architect

10 Systems Administrator

11 Project Leader

12 Development Programmer

13 Business Analyst

14 Systems Analyst

Turnover rates remain significant in both the US and worldwide (see Table 8).

Table 8 Annual Turnover Rates

All

1998 1999 2000 2001 2002

10.7% 9.0% 11.4% 10.6% 11.8%

US

1998 1999 2000 2001 2002

10.1% 8.0% 10.2% 9.9% 11.8%

Non-US

1998 1999 2000 2001 2002

11.4% 9.0% 12.6% 11.4% 11.7%


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35



These higher-than-expected turnover rates, in this context of economic slowdown or

recession, are partly explained by an exodus of workers from IT to other areas. Our

recent survey corroborates this finding (see Figure 32).

Figure 32 Have You Considered Leaving IT Due to the Current Job Market?

62%

38%

Yes

No

The rankings of turnover rates from highest to lowest appear in Table 9.

Table 9 Turnover Rates

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 information-

and/or engineering-related, and require a need for qualified senior management. The jobmarket 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.

Chile 19.3India 13.1

Italy 13.0

US 11.8

Canada 5.0

Netherlands 4.7


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36



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 (see Table 10).

Table 10 Working Hours per Year

All

1999 2000 2001 2002

Average 1,503 2,151 1,992 1,948

US

1999 2000 2001 2002

Average 1,441 2,157 2,080 1,992

Non US

1999 2000 2001 2002

Average 1,564 2,138 1,883 1,843

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 evapo-

rated, 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

2002 2001 2000 1999 1998

Worldwide 8.9 9.0 8.4 7.25 7.9

US 8.2 8.5 8.0 7.3 7.4

Non-US 9.4 9.6 8.7 7.2 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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37



Figure 33 Staff Training Days per Year

8.9

0

2

4

6

8

10

12

14

16

8.3

10.2

9.2

10.2

9.7 1

0.1

8.6 9

.2

8.2

7.2

8.9 9

.2 9.3

8.1

7.4

8.8

8.3 9

.0

7.5

9.5

7.8

8.7

7.8

6.8

7.8

7.5 8

.0

10.7

10.5

13.1

10.8

13.9

14.0

12.1

9.8

10.7

8.7

7.9

10.0

13.2

12.7

ProjectLeader

BusinessAnalyst

SystemsAnalyst

Systems

Designer/Architect

Development

Programmer

SupportProgrammer

Network

Analyst/Architect

QASpecialist

DatabaseAnalyst

Metrics/Process

Specialist

Documentation/Training

TestEngineer

Web

Specialist/Designer

SystemsAdministrator

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 devel-

opment programmers. Next in line come the systems analysts.


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38

2003 Worldw ide IT Benchmark Report

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

Figure 34 Percent of Current Staff

0%

5%

10%

15%

20%

25%

12.3%

10.5%

13.8%

8.3%

19.9%

11.1%

11.6%

5.0% 7

.2%

4.0%

3.9%

6.9%

6.7%

11.3%

11.9%

11.3%

12.8%

6.8%

20.5%

11.8%

12.3%

5.5%

8.0%

4

.7%

4.4%

8.0%

6.8%

12.4%

13.1%

8.5%

16.4%

10.8%

18.3%

9.6%

9.5%

4.1%

4

.8%

2.9%

3.0%

5.6%

6.5% 8

.6%

ProjectLeader

BusinessAnalyst

SystemsAnalyst

Systems

Designer/Architect

Development

Programmer

SupportProgrammer

Network

Analyst/Architect

QASpecialist

DatabaseAnalyst

Metrics/Process

Specialist

Documentation/Training

TestEngineer

Web

Specialist/Designer

SystemsAdministrator

All US Non-US

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.

Table 12 Percentage of Workforce at Education/Training Level

US Non-USPh.D. 8.3% 3.7%Masters 13.4% 21.29%Bachelors 40.7% 37.6%Tech School 19.7% 21.7%No Formal 17.9% 15.72%


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39



Metric Usage

On the WWB survey, we asked the following questions:

1. Are metrics actively used (see Figure 35)?

2. How frequently are they collected (see Figure 36)?

3. How many people are assigned to collect them (see Figure 37)?

Figure 35 Area Metrics Actively Used?

0%

10%

20%

30%

40%

50%

60%

70%

60%

40%

58%

42%

63%

37%

All US Non-US

Yes No

Figure 36 How Often Are Metrics Collected?

0% 10% 20% 30% 40% 50% 60% 70% 80.0%

Weekly

Monthly

Biannually

Annually

Not at All

Not Available

All US Non-US


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Figure 37 How Many People Are Assigned to Collect Metrics?

0

1

2

3

4

5

65.3

5.8

4.4

All US Non-US

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.

Results From Project Data

This year, we have begun to analyze project data supplied by our member companies. We

will begin tracking trends in this area next year.

The average cost per function point (in US dollars) by language is shown in Table 13.

Table 13 Cost per Function Point by Language

$69 4GL

$44 Ada

$11 C

$17 C++

$19 COBOL

$9 Java

$5 Oracle

$7 VB


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This analysis indicates there is an advantage to using object-oriented languages over

procedural languages.

We now have enough projects in C++ and Java to enable us to do some productivity and

defect benchmarks:

Development productivity average for C++ in KLOCs is 4,167 LOCs per month, per

person. The standard for our surveys is around 25 hours per week of actual coding

time, which gives us 100 hours per month, and 4,167 / 100 = 41.67 LOCs per hour.

For Java, the average in LOCs per month, per person is 6,210, giving 62.1 LOCs per hour.

The defect rate for C++ is 0.552 defect/KLOC.


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About the Worldwide IT Benchmark Report

Since 1995, the Worldwide IT Benchmark Report has been the definitive source of IT

performance and productivity data for Global 2000 organizations. Each year, data is com-

piled from the thousands of organizations around the world that are subjects of META

Group benchmarking engagements or participants in targeted industry surveys. The re-

sult is the most comprehensive and authoritative source on IT spending and perfor-

mance data in the industry.

META Group benchmarking engagements serve as the foundation for our measurement

research, enabling us to authenticate data and conduct ongoing sampling of IT spending in the

marketplace. The Worldwide IT Benchmark Report analyzes IT spending by industry and deliv-

ers key infrastructure metrics organized by tower, such as data center, network, desktop,

and help desk. This organizational construct is preferable for analyzing infrastructure invest-

ments - where normalizing best in class performance across all industry segments on

criteria such as work volume, spending levels, and headcount tends to be more effective.

The ultimate resource for conducting internal assessments, the Worldwide IT Benchmark

Report delivers comprehensive performance and productivity data to supplement the

strategic and tactical guidance provided by META Group analysts and consultants. The

report is the only research tool of its kind, enabling organizations to perform thorough

self-assessments of IT performance and identify opportunities to better align spending

and performance with industry norms. Armed with insights from this report, META

Group is able to further help firms undertake:

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IT Benchmark Report 2003

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