The 12 Days of Benchmarking - Day 10
Digital cost per user
So far in this series weâve explored value, experience, delivery, and operational stability.
Today we move into something every executive team is paying close attention to:
đ How much does it actually cost to provide digital services to each user?
Because in a world of constrained budgets and growing digital demand, cost efficiency matters.
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What this metric is
Digital cost per user measures the total annual operational cost of creating, operating, and maintaining your organisationâs digital products and services, divided by the number of users.
In simple terms:
What is the cost of providing digital services per person in your organisation?
It includes costs across:
This gives a clear view of the true cost of digital service provision at scale.Â
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Why it matters
This metric gives you a clear view of efficiency and value for money.
A lower digital cost per user can indicate:
- efficient operating models
- effective sourcing strategies
- and strong financial governance
A higher cost per user may indicate:
- duplicated or overlapping systems
- legacy platforms driving inefficiency
- underutilised licenses or infrastructure
- or fragmented supplier and contract arrangements
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What good looks like in practice
Organisations that perform well in this area typically have:
- A clear IT operating model
- Balanced use of internal capability and external providers
- Rationalised application landscape
- Minimal duplication and strong platform consolidation
- Effective vendor and contract management
- Active management of suppliers, contracts, and renewals
- Optimised licensing and subscriptions
- Unused or underutilised licenses are regularly identified and removed
- Strong capacity and performance management
- Infrastructure is sized appropriately, avoiding over-provisioning
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Why digital cost per user is high
The PBM highlights some common drivers of higher-than-expected costs:
- Inefficient operating models or sourcing strategies
Imbalance between internal delivery and external services
- Complex or fragmented enterprise architecture
Legacy systems, custom solutions, or overlapping tools
- Supplier and contract inefficiencies
Poor contract management or missed opportunities to renegotiate
- Over-licensing or poor subscription management
Paying for capacity or licenses that are not fully used
- Excess capacity in infrastructure or cloud environments
Over-provisioning leading to unnecessary cost
These are all highlighted as common optimisation opportunities within the PBM guidance.Â
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How to improve it
If you want to optimise digital cost per user:
1. Review your operating model
Assess the balance between internal services and external providers
2. Rationalise your application portfolio
Reduce duplication and consolidate platforms where possible
3. Strengthen vendor and contract management
Regularly review contracts and renegotiate where appropriate
4. Optimise licensing and subscriptions
Identify and remove unused or underutilised licenses
5. Improve capacity and performance management
Right-size infrastructure and cloud consumption
6. Focus on your largest cost drivers first
Start where the biggest financial impact can be achieved
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A simple reflection
If your CFO asked you tomorrow:
âWhat does it cost us to provide digital services per user⌠and why?â
How confident would you be in your answer?
And how confident would they be in your explanation?
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Take part in the benchmarking
The ITIL Performance Benchmarking Model helps organisations understand how efficient their digital services are compared to their peers.
By contributing your data, you can:
- benchmark your cost efficiency
- identify opportunities to reduce waste and optimise spend
- and strengthen your financial governance
đ Take part in the PBM survey and contribute your data - ITIL Performance Benchmarking Survey 2026ďťż ďťż
Tomorrowâs focus:
Allocated digital cost percentage - how much of your digital spend can you clearly attribute to services and value streams?
