IT assets a mystery to big business

Study uncovers the lack of knowledge chief information officers and chief financial officers from five separate countries have when it comes to their company's information technology assets.

Despite the enormous amount of money that companies spend on information technology each year, less than half of chief information officers and chief financial officers attempt to quantify the financial value of their IT assets according to a study conducted by Vanson Bourne.

The survey, commissioned by British software company Micro Focus, polled 250 chief information officers and chief financial officers across five countries (UK, US, France, Germany and Italy), with revenues ranging from $100 million (50 million) to over $1 billion (500 million) spanning a variety of industries.

The research found that a little over half (60 per cent) of financial heads had tried to measure the worth of its IT assets, while only 37 per cent of chief information officers had done the same.

Over half of the respondents believed that it may not be a case of not knowing, but a problem of not caring about their IT benefits. About 56 per cent said that the real financial value of their core software assets is either totally ignored or poorly evaluated compared with other assets including brands, property, and intellectual property.

"Given that global IT spend last year alone was over $1 trillion, this research is a wake-up call for all of us in business" said Micro Focus chief executive Stephen Kelly. "If organisations do not know the cost and value of IT assets, then they must be severely challenged to make the right IT investment decisions moving forward."

UK businesses made a poor showing, with only 12 per cent saying they know the size of their core software assets, compared with 60 per cent of their German counterparts. Similarly, only 20 per cent of UK companies surveyed tried to quantify their IT asset's contribution, another figure that placed them behind all other countries polled.

These board rooms are similarly unaware of where their money is going. Nearly a third (29 per cent) isn't sure what they spend on their software assets on a yearly basis.

Professor Soumitra Dutta, chair of business and technology at business school INSEAD, is currently investigating approaches to calculating the value of IT assets.

"This new evidence points to the fact that the size and value of IT assets, especially software assets, is clearly under-recognised compared to other corporate assets in the world's largest companies, and too little resource is dedicated to evaluating their contribution to business performance," Dutta said. "This is an issue that must be addressed if the potential of technology is to be truly realised in corporations."

The results of Dutta's work will be available in November.

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