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FAQs:  IT Investments

FAQs & Glossaries

Q. How widespread is the use of ROI calculations to make IT project decisions? Who uses it?

A. We are not aware of any hard statistics about how many organizations actually use ROI as an aide to making IT / IS decisions; however, recent surveys of IT / IS professionals found that less than one-half require ROI estimates for at least some projects, while only 20% of organizations actually have ROI measurements in place for IT projects.

ROI is favored by managers who are accustomed to traditional financial measurements; it is a measure of financial value. Decision-makers like ROI because it answers two important questions: (1) How much will we get back?, and (2) When?

Please note that ROI does have limitations as a basis for making IT project decisions. Financial value (e.g., cost savings) is not always the best indicator of IT’s worth to an organization. Alone, ROI does not provide important information that IT organizations and senior management should consider, e.g. the business value of IT projects.

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