July 2006 Survey: IT Value, Productivity Metrics Still Not Trustworthy

By Allan Alter  |  Posted 07-19-2006

July 2006 Survey: IT Value, Productivity Metrics Still Not Trustworthy

CIO Insight's 2003 ROI survey led off with the question, Do You Have Any Faith In Your ROI Numbers? and concluded that most IT executives had little confidence in their ROI numbers. Apparently, little has changed since then. This year's survey found a high degree of skepticism with business value metrics and figures. We also uncovered another reason to be dubious: IT executives are projecting significantly greater productivity increases than the figures tracked by the federal government. Somebody's not measuring productivity properly, and it's probably not the Bureau of Labor Statistics.

Research Guide:

  • Finding 1: Only six out of ten companies measure the business value of IT.
  • Finding 2: Do CIOs measure business value often enough?
  • Finding 3: Skepticism about ROI and business value metrics remains high.
  • Finding 4: IT executives exaggerate IT's impact on productivity.
  • Finding 5: How best to measure IT's value?
  • Finding 6: Many technologies and IT services are meeting, and even exceeding, their business value expectations.

    Next page: Skepticism about ROI and business value metrics remains high.

    Skepticism about ROI and

    business value metrics remains high.">

    Finding 3: Skepticism about ROI and business value metrics remains high.
    Is that why so many companies don't measure value? Most companies still find it a struggle to measure ROI—in other words, quantify IT's business value in dollars. But whether they measure in dollars or look at other forms of value, about half of respondents, be they IT executives or business executives, say their metrics don't completely capture IT's value, or are skeptical about the accuracy of the numbers.



    Research Guide:

  • Finding 1: Only six out of ten companies measure the business value of IT.
  • Finding 2: Do CIOs measure business value often enough?
  • Finding 3: Skepticism about ROI and business value metrics remains high.
  • Finding 4: IT executives exaggerate IT's impact on productivity.
  • Finding 5: How best to measure IT's value?
  • Finding 6: Many technologies and IT services are meeting, and even exceeding, their business value expectations.

    Read our previous surveys on ROI and business value:

  • ROI 2004: How Well Do You Work with the Business?
  • ROI 2003: Do You Have Any Faith In Your ROI Numbers?
  • ROI 2002: How Do CIOs Figure ROI?

    Related stories:

  • Roundtable: The Trouble With ROI
  • Howard Rubin: How to Measure IT Value
  • Christopher Gardner and Ray Trotta: How to Determine the Value of a Project
  • What Does Wall Street Think of Your Technology?

    Next page: IT executives exaggerate IT's impact on productivity.

    IT executives exaggerate IT

    's impact on productivity.">
    Finding 4: IT executives exaggerate IT's impact on productivity.
    In the first quarter of 2006, productivity in the U.S. grew 3.9 percent, according to the Bureau of Labor Statistics, considerably higher than historic levels. According to Federal Reserve Chairman Ben Bernanke, among others, information technology is a major reason. However, most IT executives believe technology's contribution to productivity is much higher. Indeed, the mean figure is 22 percent: That's especially the case with IT executives who believe their metrics accurately capture the value of their IT investments. Given the BLS figures, productivity estimates at many companies are probably too high. The danger is not that IT fails to contribute to productivity, but that CEOs, CFOs and other executives will find IT's productivity claims unrealistic. That can only cast doubt on other estimates of IT's contribution to business value.



    Research Guide:

  • Finding 1: Only six out of ten companies measure the business value of IT.
  • Finding 2: Do CIOs measure business value often enough?
  • Finding 3: Skepticism about ROI and business value metrics remains high.
  • Finding 4: IT executives exaggerate IT's impact on productivity.
  • Finding 5: How best to measure IT's value?
  • Finding 6: Many technologies and IT services are meeting, and even exceeding, their business value expectations.

    Read our previous surveys on ROI and business value:

  • ROI 2004: How Well Do You Work with the Business?
  • ROI 2003: Do You Have Any Faith In Your ROI Numbers?
  • ROI 2002: How Do CIOs Figure ROI?

    Related stories:

  • Roundtable: The Trouble With ROI
  • Howard Rubin: How to Measure IT Value
  • Christopher Gardner and Ray Trotta: How to Determine the Value of a Project
  • What Does Wall Street Think of Your Technology?