The IT Value Study was sponsored by Dell and conducted by Wirthlin Worldwide. In total, 287 IT decision-makers who use a variety of IT providers completed a survey. Approximately 105 were 'top-tier' decision-makers (CEO, CTO, controller/CFO, COO, CIO, executive vice president/vice president of finance, president/owner, and finance/business manager) and 174 fell into an 'other' category (director, manager, analyst, consultant, etc.) termed 'mid-tier' decision-makers. Only executives with either involvement in or responsibility for IT decisions for their firms were included in the sample. Of decision-makers, 22 percent came from large companies ($500 million or more annual revenue); 32 percent came from medium-size companies ($10-$500 million); and 43 percent came from small companies (less than $10 million in revenue). The margin of error for this sample size is 5.8 percentage points at the 95 percent level of confidence.
While industry experts debate the timing of the next major wave of information technology (IT) investing, a new USA-wide survey of 287 IT decision-makers makes it clear that measuring the value of technology investments will be a major factor in future spending. The findings also indicate that executives such as CEOs and CFOs will be much more involved in the process.
The IT Value Study, sponsored by Dell and conducted by Wirthlin Worldwide, was published on May 16, 2002 and it highlights the need for a greater focus on helping customers quantify the value of IT investments. While a majority of respondents said expected value of the investment was the largest determinant of IT spending approval, an overwhelming 95 percent said current metrics to measure value are inadequate.
'Given the current economy, value has taken center stage with senior executives,' said Joe Marengi, Senior Vice President, Dell Americas. 'While many businesses have been focused on the cost of technology, it'™s clear from this survey that businesses are also looking for a better way to measure the total value derived from technology expenditures.
'This new research, combined with the tens of thousands of direct conversations we have with customers every week, suggests that overall IT value is seen as one of the most critical assets for competitive advantage,' added Marengi.
Other highlights of the IT Value Study include:
- 72 percent of the large companies surveyed rated return on investment (ROI) as being of high importance versus 49 percent for Total Cost of Ownership;
- Nearly three quarters (72 percent) of decision-makers said IT purchasing at their firm has come under increased scrutiny in the last 12 to 18 months;
- Even with the intense scrutiny, 89 percent of those surveyed said that their companies plan to maintain or increase technology spending over the next 18 months;
- Four in 10 respondents believe that there was too much spending on Y2K '“ but that currently there is too little spending on basic IT infrastructure (51 percent) and security (68 percent).
Responding to Customer Needs
'Focusing on value, which is generally measured by ROI, is the right approach,' said Tom Pisello, author of 'Return on Investment for Information Technology Providers: Using ROI as a Selling and Management Tool' and founder of Alinean, a developer of ROI and value measurement tools for technology vendors, consultants and CIOs. 'Yet, as this survey shows, decision-makers are increasingly focused on value '“ determining how to link major IT spending to strategic goals, tangible gains in productivity and concrete business benefits, such as increased sales, customer acquisition and profitability.'
