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IT Investment vs IT Expense

Does the money that we spend on IT really make a difference?
By Walter Pinson
Article Rating:
February 23, 2007 12:51 AM EST
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 464

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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Published February 23, 2007 – Reads 464
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More Stories By Walter Pinson

Walter Pinson is the Chief Software Architect at SMBLive; whose IAmFound social marketing platform helps SMBs (small and medium-sized businesses) get discovered online and generate inbound sales leads. In his role as CSA, Walter manages a globally distributed product development group and has SaaS products deployed at major telecommunications channel partners in the US, UK, Switzerland, Canada, and Mexico. Additionally, Walter is a co-founder and principal of Pinson3 Systems; a boutique software engineering concern serving the intelligence and defense sectors with solutions ranging from enterprise web-based multi-modal biometric analysis systems to information warfare training systems. Prior to his role at SMBLive and founding Pinson3 Systems, Walter was a Senior Strategy Consultant with Microsoft focused on SaaS, SOA, and .NET adoption in the telecommunications sector. Walter has published articles for Cloud Computing Journal, is a member of ACM and IEEE, and currently has one patent pending. He holds a bachelor's degree in computer science from The Volgenau School of Information Technology and Engineering at George Mason University, where he focused on distributed and parallel computing. Walter is currently working on his MBA at the GMU School of Management.