Assessent Of Business Value Essay

652 words - 3 pages

In today's uncertain business climate, IT investment is often in the budgetary crosshairs. But in fact, now is the ideal time to upgrade existing infrastructure and invest in next-stage technologies that create value.
And speaking of costs, what role does a capital-intensive function like information technology play in this quest for high performance? Many business leaders are understandably wary of IT investments. Although spending on information technology has increased substantially in the past 10 years, many technology projects have been characterized by sketchy metrics, long cycle times to new products and unpredictable results. No wonder many executives have come to regard IT ...view middle of the document...

A report of Bank of America study1 reveals that most companies have reduced their technology reinvestment by half in the past three to four years. These companies are allowing their IT infrastructure to decline. An outdated, poorly maintained infrastructure cannot be the foundation for efficient current operations, much less competitive advances. In contrast, high-performing companies look beyond cost alone to the total impact of a technology project—to its ability to help build a superior cost position and faster response times and, as a result, greater market share. When they consider cost, they take the broad view. For example, they look not just at purchase cost but at total cost of ownership over time. Or they look at the annual cost savings and other benefits (such as improved security) that can result from
upgrading to newer technology. And these companies measure investment and risk so rigorously that they are able to predict from past experience which projects will exceed return on-...

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