Enterprises 'not fully measuring IT value'

Lack of a commonly-agreed understanding of value is leaving enterprises unsure of the value that they are relaising from their IT investments, claims a survey by IT industry body ISACA.

The poll of 1,217 IT professionals across nine countries means that the ‘Value of IT Investments’ found that half of the respondents believe they are realising between 50-74 per cent of expected value from their IT investments, and nearly 20 per cent believe they are realising 75-100 per cent. Yet half of respondents measure the actual value only ‘to some extent’, while 10 per cent do not measure value at all.

At the same time, half of the respondents reported that accountability for such value measurements is delegated to the IT function itself, instead of remaining with the business.
“While most enterprises feel that they are realising value from IT, few have a clear understanding of what value means, and even fewer measure it,” comments John Thorp, chair of ISACA’s Val IT Development Team and president of the Thorp Network. “This raises the question, ‘On what basis are spending decisions made?’ Additionally, enterprises that do not fully measure value are unable to determine which investments are successful and which need to be cut—and so are likely to miss-out on revenue-generating opportunities, pursue unsuccessful investments, and neglect competitive advantage.”
The survey also indicates that, despite the challenging economy, 30 per cent of companies are increasing their investments in IT this year, while only 13 per cent plan to reduce spending and 14 per cent plan to freeze it at the current level. In the UK this average isn’t replicated, as just 19 per cent of organisations intend to increase their investment while 20 per cent plan to cut spending.
The survey identified some regional differences—specifically between established economies and fast-growing ones. Of the nine countries surveyed — Australia, Canada, France, Germany, Hong Kong, India, Mexico, the UK, and the US — the India-based participants were the most advanced in adopting effective value management practices, and in assigning accountability for those investments to the business. Seventy per cent of respondents’ organisations in India have a framework for selecting the IT-related investments that will result in the greatest value, and 57 per cent ‘fully measure’ value.

Almost half of Indian organisations are increasing IT-related investment based on potential or expected contribution to business value, and 63 per cent said there is a cross-departmental understanding of what constitutes value in IT investment—a figure significantly lower in the UK, at just 22 per cent, and the US, at 34 per cent. Top-down management responsibility for optimising IT investment was also evident, with one-third of respondents indicating board or board chair level.
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