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Governing and Managing IT Investment and Spending

Return-on-investmentEvery organization wants to get the most out of its IT initiatives – without spending more than is needed or realizing that you have not spent enough to get the job done until it is too late. The key to achieving this depends on how your organization governs and manages its IT investment and spending – and having effective policies and procedures in place can help you to do just that.

The issue of governing and managing IT investment and spending was one of the top 10 technology initiatives in the AICPA’s 2013 North America Top Technology Initiatives Survey results, which was conducted jointly with the Chartered Professional Accountants of Canada. Governing and managing IT investment and spending ranked eighth in the top ten technology initiatives in the U.S. and was the fifth biggest concern in Canada. However, only 38% of survey respondents in both countries felt confident or highly confident in the ability of their clients’ organizations or their organizations to address this technology initiative.  So, how can you elevate those confidence levels?  By determining how to effectively maximize your IT ROI.

Maximizing Your IT ROI

If an organization’s policies and procedures governing information technology are ineffective, or the alignment between its information technology and business strategies is poor, it risks not maximizing the value from its IT investment. As a result, it may spend too much – or too little – on IT initiatives and not receive an adequate ROI.

Effectively managing those risks depends on an organization’s ability to govern and manage IT investment and spending. First, it requires strong alignment between its mission and strategic plan and its IT strategy. Secondly, there must be  a strong IT governance function. The organization prioritizes IT initiatives and related spending, manages its investment in such initiatives and analyzes the value of its IT investment portfolio.

Run, Grow and Transform Portfolio Initiatives

An organization’s portfolio should represent a mix of “Run,” “Grow” and “Transform” initiatives that are aligned with the organization’s business strategy and risk tolerance:

  • Run. A Run budget aligns the resources that maintain an organization’s operations.
  • Grow. Grow spending aims to increase the organization’s IT proficiency.
  • Transform. Transform encompasses research and development projects such as proof of concepts or prototypes.

Effectively governing and managing IT investment and spending isn’t a one-time process – especially in today’s world of ever-changing IT initiatives and technologies.  Organizations must continually monitor their policies and procedures to ensure that they are in accordance with strategic initiatives. 

Susan Pierce, CPA/CITP, CGMA, Senior Technical Manager – IMTA, American Institute of CPAs. Susan drives the strategic mission of providing value to the IMTA professional, the CITP credential holder and the technology engaged CPA.

ROI image via Shutterstock

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