According to latest research, firms know very little about the value of their IT assets. I am not surprised at all. The frankly ridiculous way spend is carried out on IT assets leads one to this rather obvious conclusion that one doesn't know what they have spent money on.
Let me put this in another way. When you do not know the benefits that an IT development project will produce, how can you measure the value of the IT assets that the project has thrown out? In far too many projects, there is no mention of the benefits, or even if there is any mention, it is generally made on the basis of a finger in the air.
So the value of an asset is usually just the amount of money it took to produce the asset. If it took a contractor 1 day to make it and you paid the contractor £1000, then the value is £1000. People tend to do things in the IT world which are normally not done elsewhere. It is simply because people are scared of the stuff and jargon and do not ask silly questions.
The survey threw up some scary numbers:
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.
If you were an MD or a head in the front office or anybody who is going to pay for any IT development, here's a small test for you to try it out on your CIO or Head of Technology. Ask him to justify the spend he has made till today in 2007 and ask him for the value (not the book value but the market value). Best time to do this is when he comes to you for the 2008 budget request. More often than not, he will not know. When you consider that IT spend is most probably going to be the second highest spend line on your cost base, one wonders how you are going along blindly without knowing the value of it. Would you do the same with your personal investments?
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