IT Investment vs IT Expense

If you are responsible for IT expenditures at any level within an organization, there are certain questions that you may ask yourself.

1. Does the money that we spend on IT really make a difference?
2. Does the technology that we purchase produce some material benefit or strategic advantage over a period of time?
3. Do the IT projects that we fund support our company’s strategic business objectives?

If the answer to any of these questions is “NO” or “I DON’T KNOW”, then there is a high probability that IT represents more of an expense in your organization rather than an investment.

An organization’s approach to making decisions about which technologies and technology solutions to purchase and deploy is part of what makes up that organization’s IT management posture. On one extreme, an organization can be focused on tactical IT expenditures. On the other extreme, the organization can be focused on strategic IT investments. Clearly, the more successful organizations lean toward the strategic investments.

It is important for managers at every level to understand their organization’s IT management posture. Only after gaining a general understanding of where the organization stands can improvements begin to be made.

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