The Cost of Bad IT Economics: CIO Insight

CIO Insight had an article written for larger businesses but one that smaller businesses can learn from. I’ve excerpted the first few lines here:
Benchmarking guru Howard Rubin says companies get it wrong when valuing their IT. Here’s how they must change.
In times of economic crisis, companies are quick to slash IT costs. With fears of a recession looming over the corporate world, CIOs are facing the axe once again. But no matter how many times CIOs proclaim their strategic value—or the strategic value of their departments—businesses too often view IT as a cost, plain and simple.
IT executives have been rallying against that perception for years, but they’re getting little attention. Howard Rubin says it’s about time that changed.

An IT benchmarking pioneer and self-proclaimed “metrics arms dealer,” Rubin is a former fellow with corporate strategy consultancy Norton, Nolan & Co., where he developed metrics for application portfolios and helped create the balanced business scorecard. He also serves as a senior adviser to Gartner and a research affiliate to the Center for Information Systems Research at MIT Sloan School of Management. A former executive vice president of META Group and professor emeritus of computer science at Hunter College of the City University of New York, Rubin has been an IT adviser to the U.S., Canadian, Indian and other governments.
Rubin says businesses see better results when they make sound IT investments during economic downturns. When they don’t, they run the risk of falling behind competitors. And the cost of catching up, he says, can be insurmountable.
But CIOs are as guilty as their bosses in misinterpreting the true value of IT investments. To turn the tables, Rubin says, IT executives must recast the conventional language around IT expenditures and strategy.
Rubin recently spoke with CIO Insight online editor Brian P. Watson about what companies do wrong in valuing their IT investments, and what CIOs must do to change that perception. What follows is an edited transcript of their discussion.

Read the full article here.

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