Don't get caught out on IT finance

A forthcoming lecture from Michael Blackstaff, author of a new BCS book, Finance for IT Decision Makers, aims to help IT professionals avoid the big but all-too-common IT finance blunders.

A forthcoming lecture from Michael Blackstaff, author of a new BCS book, Finance for IT Decision Makers, aims to help IT professionals avoid the big but all-too-common IT finance blunders.

For example, there are different rules about what should go into cashflow and what into profit-and-loss cases. Return on investment is the only evaluation applicable to profit-and-loss financial cases, whereas net present value, internal rate of return, payback, and other methods apply only to cashflow cases. Applied wrongly, such evaluations are meaningless.

Depreciating IT assets over too long a period can inhibit their replacement because of a possible substantial loss on disposal when the asset is scrapped or traded in.

Leasing is a useful and popular way of financing IT, but there are pitfalls for the unwary. The buyer, attracted mainly by the lowest primary period lease rate, should always ask who is paying for the apparently "free lunch".

Blackstaff will explain the importance of understanding these, and other, financial aspects of decisions about IT by those making or influencing them.

Hugh Pike, co-author of the chapter on outsourcing, will give an overview on outsourcing financial cases and illustrate the financial and accounting challenges this poses.

The event will be held on Monday 25 September in London.


 

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