Firms not fully measuring the value of IT

What happened to return on investment?

Half of IT managers believe they are realising less than 75 per cent of the expected value from their IT investments, according to research.

The survey by the Information Systems Audit and Control Association (ISACA) suggests that almost a fifth of respondents believe they are achieving 75 to 100 percent, but only half of the firms polled measure the actual value "to some extent", while one in 10 do not measure IT value at all.

"Most enterprises feel they are realising value from IT, but few have a clear understanding of what value means, and even fewer measure it," said ISACA's Val IT development team chairman John Thorp.

"Therefore, on what basis are spending decisions made?"

Thorp said organisations not fully measuring value would be unable to determine which investments are successful and which need to be cut.

"This could mean firms missing out on revenue-generating opportunities, pursuing unsuccessful investments and neglecting competitive advantage,” he said.

However, despite the challenging economy, ISACA's survey showed 30 percent of firms increasing their IT investments this year, with only 13 percent planning to reduce spending and 14 percent planning a freeze.

ISACA's international vice president Robert Stroud, said organisations should be careful not to ignore the value-generating opportunities of IT in favor of cost cutting.

"IT has the power to add competitive advantage and significant business value, so it is critical to focus on those opportunities—particularly in troubled economic times,” he said.

The survey polled 1,217 IT governance, security and assurance professionals in Australia, Canada, France, Germany, Hong Kong, India, Mexico, the UK and the US.

ISACA's Val IT framework helps firms measure, monitor and optimise the business value of IT-related investments.