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IT Spend Rates…how high are they?

US Based Executives ‘question business value’ of tech spend.

Recently I was exposed to a survey taken by multiple senior finance executives regarding their opinions and facts surrounding the cost of IT and communications. Overall the “gist” of the information gathered clearly shows technology is needed,  but do not believe they are getting the types of info they need, and the spend or “burn rate” was grossly negligent to the ROI.

Below are some of the highlights or the articles finer points.

After reading…what are you opinions or thoughts on high communication spend rates or the mismanagement of technology costs in business?

  • Senior finance executives say their companies are weak at converting business spend to technology value.
  • Almost none of those surveyed (3%) rate their companies as “excellent”, according to a new survey of more than 150 senior finance executives by CFO Research in collaboration with consultants AlixPartners.
  • The survey also finds that more than two-thirds of financial executives (66%) give their companies a “C” or “D” grade when it comes to measuring financial returns from discretionary IT projects, such as big data ones, designed to improve or add to a company’s business and profits. Only 5% gave their companies an “A”.
  • Meanwhile, at the other end of the IT spectrum, the survey reveals that “keep-it-running” IT costs – non-discretionary support and maintenance systems – are cannibalizing funds available for business-improving IT.
  • A plurality of respondents (49%) estimates that, over the past two years, their company has maintained approximately a 70-30 ratio of keep-it-running to improve-the-business IT spending, and of that amount, a solid majority – 63% – believes that their company’s spending is weighted too heavily toward keep-it-running IT services, and that a greater share should be directed to improve-the-business IT projects.
  • The survey goes on to show that, despite massive IT investments in recent years, companies are not getting enough of the kind of information they need to successfully run and grow their businesses.
  • “The message from CFOs and other senior finance executives is loud and clear – companies are spending too much on IT, and they’re not getting the business information that they truly need,” said Meade Monger, managing director at AlixPartners and co-lead of the firm’s Information Management Services unit.

By Todd Larsen CEO Limitless Technology~CRS  April, 10th, 2013

Limitless Technology~CRS

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