Corporate versus Software SG&A

If the software industry (in particular, though other tech companies and research firms like Gartner also have this problem) needs more urgency on why it needs to slash its high SG&A, here's another major reason: Its Customers are ruthlessly slashing their own SG&A.

Courtesy of Sukumar, I see Hackett's 2006 Book of Numbers shows that world-class companies (manufacturing, financial services etc) are now spending 40 percent less than typical companies overall on SG&A (9 percent of revenue versus 15 percent).

When you walk in to a first-quartile 9% SG&A company, even the slickest software sales guy cannot sell the need to spend 25, 35, 45% in his/her industry...

BTW - Hackett has been doing pioneering work around business process benchmarking for a while now. I quoted their benchmarks at Gartner starting in 1995. I have invited Rick Roth, the Chief Research Officer to do a Real deal guest column for this blog.  In addition to obviously being real smart, really nice guy.