مقاله سال ۲۰۱۶

Managing and justifying IT costs is an essential responsibility of Chief Information Officers (CIOs). As the presented scenario illustrates, these responsibilities intensify during times of economic stagnation, when firms must search for ways of saving on costs. But even during periods of growth and expansion, IT managerial control ratios are at the heart of capital allocation decisions, which have operational and strategic impacts (Kobelsky, Richardson, Smith, & Zmud, 2008). A variety of IT investment evaluation methodologies can be used to analyze IT costs, including return on investment (ROI), net present value (NPV), internal rate of return (IRR), real options analysis (ROA), and the balanced scorecard (BSC). However, managers often reject these methodologies as impractical. Estimating ITcosts and benefits is often difficult, expensive, and–—in the case of estimated IT benefits–—not entirely possible. Instead, CIOs turn to cost benchmarking to justify IT expenditures.

IT cost benchmarking compares IT spending against industry averages or best-in-class information systems (IS) organizations. Determining the  relative standing of one’s IS organization, either in relation to other companies or business units in the same firm, provides support for extant or additional investments in IT. Comparisons can fuel cost-cutting initiatives or help justify higher spending levels.