Thanks Sachiko.
I'm forwarding this to the Certified Open board list for archiving purposes.
Shane
Sachiko Muto wrote:
From yesterday's FT: of relevance for CO.
-------- Original Message -------- Subject: Groups know little about value of IT assets Date: Mon, 01 Oct 2007 11:48:40 +0100 From: Dominik Olewinski do@chelgate.com To: Sachiko Muto msm@chelgate.com
Sachiko,
The text below from today's Financial Times on how little companies know about the financial value of their IT assets. * “If organisations do not know the cost, size and value of IT assets, then they must be severely challenged to make the right IT investment decisions,”
Groups know little about value of IT assets
By Philip Stafford in London
Published: September 30 2007 23:01 | Last updated: September 30 2007 23:01
Companies are spending billions of dollars on information technology every year but few boardrooms know the value of their hardware and software and the contribution they make to their businesses, a study published today has found.
The survey of 250 chief information officers and chief finance officers from companies in the US, UK, France, Germany and Italy found that fewer than half had tried to value their IT assets and 60 per cent did not know the worth of their software.
The study, commissioned by *Micro Focus http://mwprices.ft.com/custom/ft2-com/html-quotechartnews.asp?FTSite=FTCOM&q=MCRO&searchtype&expanded=&countrycode=uk&s2=uk&symb=MCRO&company=NEW*, a UK software developer, canvassed businesses with revenues from $100m to more than $1bn across all industries.
Although there have been fears of a slowdown, investment in such technology by companies has weathered the slowdown seen elsewhere.
Spending on software, computers and peripherals in the US has risen 8.4 per cent this year. IDC, the research firm, estimated companies committed to spending $1,160bn on such technology in 2006.
However, the *Micro Focus http://mwprices.ft.com/custom/ft2-com/html-quotechartnews.asp?FTSite=FTCOM&q=MCRO&searchtype&expanded=&countrycode=uk&s2=uk&symb=MCRO&company=NEW* research found that 30 per cent of respondents did not know how much money their companies were spending on software each year.
It also found a marked difference in approach between finance and IT directors. “Only 37 per cent of CIOs have tried [to quantify their assets], compared to 60 per cent of CFOs,” it said.
Soumitra Dutta, dean of external relations at Insead, the Paris-based business school, helped to write the questions for the survey. He said the evidence suggested that the value of IT assets, especially software, was under-recognised compared with other corporate assets.
“We’re finding the tech people tend to focus on the ‘new’ – 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,” he said.
Prof Dutta is working on possible guidelines for valuation of IT assets, which are expected before the end of the year.
The study found that 56 per cent of respondents thought that the financial value of software was ignored or poorly evaluated compared with brand, property and intellectual property values.
*“If organisations do not know the cost, size and value of IT assets, then they must be severely challenged to make the right IT investment decisions,” *said Stephen Kelly, chief executive of Micro Focus.