What's The Value Of IT?

Almost two-thirds of CIOs and CFOs don't know -- and don't try to know. That's according to a new survey by Micro Focus. Do you know what your software's worth?Vendor surveys tend to be self-serving, somehow almost always arriving at a conclusion that would best be served by that vendor's product niche. Micro Focus develops and markets IT-asset management software, among other products.

Nonetheless, a recent survey by Micro Focus generated some startling results, according to the company. The survey, conducted by Insead, an international business school, sought responses from 250 CIOs and CFOs (50% each) in companies with revenue from $100 million up to more than $1 billion across five countries: England, France, Germany, Italy, and the United States.

According to Micro Focus, less than half (48%) of all respondents try to quantify the financial value of their IT assets -- 37% of CIOs and 60% of CFOs. And less than a third (29%) ever try to quantify the contribution their IT assets make to their business' performance.

That's surprising -- but not startling. Trying to quantify the value of IT has been something of a Holy Grail for management gurus and business professors, without much real-world success. The problem is that software, like a brand new car, depreciates in value dramatically once you drive it out of the showroom. The value comes from what you do with it in your organization.

On the startling side, Micro Focus says that almost a third (29%) of respondents don't know what they spend on their core software assets annually -- and that includes 30% of the CFOs. That boggles the mind -- how could a CIO not know what he or she spends on core software on an annual basis?

However, Micro Focus says the "vast majority" of the CIOs in the United States know their annual software spend. (Micro Focus will release the complete survey results next month.) Still, how could that number not be 100% of U.S. CIOs -- and their colleagues throughout the world?

Here's a link to a Financial Times story about the survey.

Do you know what your organization spends on core software annually? And have you tried to quantify the value of IT to your organization? Let us know.