Big business fails to value IT

CIOs need to recognise the value IT adds to the business

Nearly two-thirds of executives do not know the financial value of their ITassets and less than half attempt to quantify it.

A further third of chief information officers (CIOs) and chief financial officers (CFOs)do not know what they spend on software, according to a survey by Micro Focus.

More than half of the 250 respondents think the real financial worth of core software assets is ignored or poorly evaluated compared against brand, property and intellectual property values. And only 37 per cent of CIOs have tried to put a figure on the value, compared with 60 per cent of finance heads.

The figures are a wake-up call in the context of the $1 trillion (£500bn) annual global IT spend, 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 investment decisions moving forward,” said Kelly.

The size and value of IT assets, especially software, is clearly under-recognised compared to other corporate assets , said Professor Soumitra Dutta, chair of business & technology at international business school INSEAD.

"Too little resource is dedicated to evaluating IT’s contribution to business performance and this is an issue that must be addressed if the potential of technology is to be truly realised in corporations," said Dutta.

An investigation into how the value of legacy IT assets can be calculated, undertaken by INSEAD on behalf of Micro Focus, will conclude able in November.