1996 Worldwide Benchmark Study Shows IT Dollars Being Poured Into Black Hole.

STAMFORD, Conn.--(BUSINESS WIRE)--June 3, 1997--

1 in 3 Organizations Has No Data On Its Application Portfolio;

Year 2000 Efforts Force The Issue, Reveal Void In

IT Responsibility and Accountability

META Group, Inc. (NASDAQ: METG) today announced the results of the 1996 Worldwide Benchmark Study which show that most IT organizations do not possess the data required for effective management of their application system assets.

The Benchmark study of 873 companies worldwide revealed the

following:

- 33% of companies still have no data on their inventory of software

applications, including how many applications they have, application

size, and where applications reside;

- 50% have no data on the growth rate of their portfolio; that is,

how much functionality has been added, changed, or deleted over the

year;

- Only 6% of companies surveyed have across-the-board data on the

quality of their systems;

- And finally, only 33% have completed a full impact assessment of

their complete portfolio, a mandatory step toward Year 2000

compliance.

The 1996 Worldwide Benchmark Study was recently conducted by Dr. Howard Rubin, an internationally-renown authority on benchmarking and a META Group Research Fellow.

"It is clear that companies are not treating their information systems as investments," said Dr. Rubin. "A financial portfolio manager would be fired if he or she did not know the size of the portfolio being managed, the performance of the portfolio, and the quality and risks of the investments. A medium-sized company today with a portfolio of 50 million lines of code essentially has an asset with a replacement cost of perhaps $500 million. This is a sizeable investment that is clearly not being managed as such. The financial community would not accept this and neither should the IT community or senior corporate management."

Wide-Ranging Unknowns Revealed

The report also shows that a significant slice of IT management is not adequately tracking a number of other indicators that are relevant to IT performance and productivity:

- 34% have no data on their development productivity;

- 37% did not know what tools and techniques were being used in

their development and support environments (not a single company had

data on the depth and breadth of tool use); and

- 60% did not have projections as to the distribution of

work between development and maintenance for

the latter part of 1997 and into 1998.

Year 2000 Impact Felt

According to Dr. Rubin, Year 2000 conversions are having a decided impact on how well companies are addressing the issue of application portfolio management. "As Year 2000 pressure builds, companies have begun to increase their quantitative knowledge of their information systems, and in so doing, have begun to shine some light into the 'black hole' of portfolio management," said Rubin. "This has resulted in improved awareness of the parameters necessary to manage IT's assets."

This observation is born out by the results of previous years' reports, which were far worse than those of the 1996 study. In the 1994 report, for example, only 33% of companies had basic portfolio information, 3.3% had growth rate information, and 1% had measurements of application quality.

1996 Worldwide Benchmark Study Demographics 

The 1996 Worldwide Benchmark Study, a comprehensive study of IT organizations, is used by META Groups Software Engineering Productivity Strategies service to help clients benchmark development and maintenance productivity and assess the overall value of IT investments.

The core of the study, the Software Engineering section, involved 93 companies providing information on their portfolios, projects, people, practices, cost structure, and development and maintenance productivity quality.

In the Industry Watch section, 404 companies were interviewed on their high-level spending patterns, work distribution, priorities and software engineering infrastructure. The Financial IT Spending Analysis relied on external data sources covering more than 600 organizations.

Dr. Howard Rubin, a full professor and chairman of the Department of Computer Science at Hunter College of the City University of New York, is the developer of the Worldwide Benchmark Database, a collection of statistical IT research that includes performance and financial information from thousands of companies throughout the world and across all major industries. Today, Dr. Rubin is focusing his personal research on the use of metrics in modeling to produce business and software process "flight simulators" and "navigation systems" for software projects. His international work in software measurement and economics has been used in briefings for President Clinton and Vice President Gore.

Headquartered in Stamford, CT, META Group, Inc. is an independent market assessment company providing research, analysis, and advisory services regarding developments and trends in information technology. META Group currently serves more than 1,200 clients worldwide. Additional information about META Group is available on the World Wide Web at http://www.metagroup.com.

All trademarks are the property of their respective owners.

CONTACT: Dr. Patricia Neptune

Neptune Group International Inc.

203-221-2820 or

[e-mail]