Businesses spent billions on IT in 2006, and spending is up a little over 8% this year according to IDC. Yet a new study reveals that neither CIOs nor CFOs have much of a sense of the value of their companies' IT assets. The survey, conducted by UK software developer, Micro Focus, canvassed 250 executives at companies with revenues of at least $100 million across the US and Europe. The results:
INSEAD professor, Soumitra Dutta, spoke to the Financial Times about the results, and is working on guidelines for the valuation of IT assets which are expected by the end of the year. His comments:
- 60% did not know the worth of their software, and 30% did not know how much their company's were spending on software each year.
- Only 37% of CIOs have tried to quantify their assets compared to 60% of CFOs
- 56% thought that the financial value of software was ignored or poorly evaluated compared with brand, property and intellectual property values.
"We're finding the tech people tend to focus on the 'new' â€" finding a business case for the 'new'. Very little thought goes into the benefit and almost none goes into the managing of the legacy assets."
Micro Focus CEO, Stephen Kelly, concludes, "If organizations do not know the cost, size and value of IT assets, then they must be severely challenged to make the right IT investment decisions."
(Image of calculator by Phillip, CC 2.0)