A third of organisations are unable to calculate the
financial cost of their IT systems, a survey from Vanson Bourne has
found.
The survey of 113 senior business executives and 170 IT
professional commissioned by Managed Objects, a company
specialising in business service management, found respondents
lacked accurate cost data (53%). Respondents also admitted they
were unable to allocate costs by service (48%).
One in three business managers (35%) said that the current
method of measuring the cost of IT applications was not very
accurate.
While 55% of IT managers said they did a sufficiently effective
job of controlling costs, nearly an equal amount of their business
counterparts disagreed. Fifty three per cent of business managers
said that IT did a somewhat effective job but could use
improvement. Only 7% of the overall sample agreed that IT did an
extremely effective job of controlling IT costs.
More granularity in the measurement of IT costs would yield
improved decision making regarding IT cost management (60%) and
better business alignment of IT spend to corporate goals (54%)
according to respondents.
The problem with measuring IT costs becomes apparent when users
try to cost any form of shared service, web service or even a
shared IP-based network. Will Cappelli, research VP at Gartner
said, “There is a huge gap between the way IT is bought and
consumed by organisations.”
In Cappelli’s experience the financial model used to measure
return on investment has been too simplistic. The business has
generally focused on the cost of the IT asset, without linking this
to any improvement in business.
What this has meant, according to Cappelli, is that users found
it difficult to measure the cost benefit of buying additional
functionality.
Sean Larner, managing director for Europe at Managed Objects,
said, "Given the industry average cost of a server is £40,000,
businesses want a means to measure return on investment."