A study into the disclosures made into the accounts of a number of leading companies revealed that out of 70 companies across six industry sectors, only six explicitly attribute any value to technology assets in their annual accounts.
“If businesses could find a way to show the fair value of their IT application assets, investors would be better informed,” said Philip Adler, director at KPMG. “Businesses may well make different investment decisions when renewing the value of IT systems companies have. Enterprises’ foundations, such as the inventory applications used by Tesco, are built on these types of assets and are inherent throughout any business.”
“Companies in today’s competitive business landscape are striving to demonstrate value to shareholders and customers,” said Soumitra Dutta, professor of information systems at Insead business school. “Exploring how companies today show the value of their IT applications, and assessing the opportunities for a more robust valuation of these assets in the future clearly needs more research,” he added.
Laurie M. Orlov, vice president and principal analyst at Forrester said that CIOs should be taking stock of their IT investments, evaluating the inventory, and creating a management structure to cut waste and streamline operations wisely. “IT will still play a marginal role in enterprise strategy and decision-making as long as its value remains undisclosed,” she said.
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