Project Management & Development
Information Technology Financial Justifications
The implementation of information technology in diverse types of business has been considered as a prolific aspect in companies’ operations nowadays. Software, systems, and applications are utilized to support the diverse organizational structures and functions of every business procedures. However, behind every decision made in the development and employment of innovations in information technology, it would be beneficial to consider financial study and analysis.
Many corporate establishments consider software applications such as Budgeting and Planning Software and ERPs as essential tools in their business. This is due to the fact that such software provides favorable assistance in their operation. Hence, these products are part of business’ financial considerations. An article in CFO.COM indicates such case stating that For some companies, ERP software has become the number-one line item on their IT budgets.
A and they’re willing to invest in software that helps them drill down and understand performance.
However, despite of the of diverse IT innovations, companies still consider some financial justifications because of the current economy. When focusing on future development of IT projects, companies take a broader look on the possible profits they can gain against the IT spending they will invest on a project. Maximizing Your Optimizing indicates a reason for this, stating that One reason for the hesitation is that profit-optimizing projects are not quick hits. Success often requires investing in and integrating lots of software, a serious time and capital commitment.
Financial justification in information technology is suggested to be a crucial part in finance staffers. John Goff reveals that the process of finding the right vendor for systems needed by a company requires analysis from a skilled investment banker.
Considering financial justifications when looking forward to IT issues is indeed important to every business organizations. Information technology is not only about the convenience, efficiency, and fast service it brings to its users. Nowadays, information technology is also about the consideration of gains and losses an IT innovation brings to a company. While considering the advantages of employing information technology as a solution to problems and difficult tasks, providing focus on some financial justifications can in the deliberation of IT as a solution.
The abundance of IT providers in the current market allows many options for companies who look forward on an IT project. However, viewing the importance of other elements in the course of developing an IT solution is essential. Gauging the benefits from investing in IT projects is a management process most companies take. Goff reveals that 86% of the respondents in the CFO Research/Getronics survey said they use at least one financial metric to measure IT funding. Some 64% of the they use a straightforward ROI calculation to assess tech projects.
Nyberg, Alix. Maximizing Your Optimizing.
CFO.COM. August 23, 2003. http://www.cfo.com/article/1,5309,6628,00.html?f=related
Goff, John. What About Technology.
CFO.COM. August 22, 2003. http://www.cfo.com/article/1,5309,6617,00.html?f=related
CFO.COM. August 22, 2003. http://www.cfo.com/guides/1,6106,41,00.html