Maintenance Labor Cost Percentage
This guideline describes how to measure Maintenance Labor Cost Percentage to evaluate software application maintenance efficiency.
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Main Description

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.