Why does IT investment lead to worse company performance?

  • Why does IT investment lead to worse company performance?

    Research (*) in 737 European financial institutions indicates that those investing the most in hardware and software had the poorest profitability and efficiency. Additional research (**) in the UK shows certain public sector organisations spend 30 times more on software licenses than others who perform exactly the same functions.

    Quite simply many organisation spend considerable amounts on IT assets and perform worse than their competitors who spend far less. Why is this?

    IT investment vs company performance

    Discussions with IT senior management reveal an interesting answer: they don’t know which parts of their IT are being used effectively, or what the impact of the use or non-usage is on the business.

    Software Asset Management (SAM) technology such as Aspera SmartTrack provide a clear picture of which IT resources are driving key business processes. Equally effective, a good SAM platform will also inform which resources are a complete waste of money. Once license management data delivers this information to management, the causes of inefficiency becomes clear. Only then can proactive decisions be made on what to do about it.

    Last year Gartner recommended companies optimise their Software Asset Management and IT Asset Management (ITAM) capabilities as one of their “Top 10 Recommended IT Cost Optimisation Ideas”. In their report, Gartner concluded that SAM is “one of the most overlooked areas of cost-savings opportunities.”

    With a Software Asset Management program, organisations gain more than licence compliance and cost savings. Suddenly, companies start to see more effective results from their IT investments, while reducing compliance risk by increasing visibility into their software usage and IT assets.

    IT Asset Management is central to improving the whole focus and performance of an organisation. By benchmarking IT asset usage against business process performance, companies can track costs to savings and efficiency improvements. In many cases, as a result, IT asset management become central to improving the whole focus and performance of an organizations rather than being secondary service.

    Click here to learn how you can gain visibility of your IT usage efficiency or to get your free reports (*) and (**).

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