Overview
The Maintenance Labor Cost Percentage metric is used for measure the portion of the organization's overall IT labor
cost devoted to application maintenance. This is a major IT financial performance indicator and is almost exclusively
influenced by software operational cost factors.
Measurement Method
Maintenance Labor Cost Percentage = Application Maintenance Labor Cost / Total IT Labor Cost - where
Application Maintenance Labor Cost = Total labor costs for maintenance of all software applications by the IT
organization. Cost should be quantified in terms of currency (e.g., dollars).
Total IT Labor Cost = Total labor costs for the entire IT organization. Cost should be quantified in terms of currency
(e.g., dollars).
Measurement Analysis
Maintenance Labor Cost Percentage provides an indication of how efficient the organization manages the quality of
software applications. Rendered as a percentage, this metric facilitates trend charting and comparisons from period to
period to determine performance over time.
The target Maintenance Labor Cost Percentage is highly dependent upon application technologies and environments,
relative application maturity, and the degree innovation required by the business. The optimal value is set by IT
management but must be evaluated in the context of overall software application quality. That is, it is only desirable
to achieve lower software maintenance costs while maintaining or improving production software quality.
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