IT Investment (Information Technology Investment)
IT Investment or Information Technology Investment means an expenditure of information technology resources to address mission delivery and management support. This may include a project or projects for the development, modernization, enhancement, or maintenance of a single information technology asset or group of information technology assets with related functionality, and the subsequent operation of those assets in a production environment. These investments shall have a defined life cycle with start and end dates, with the end date representing the end of the currently estimated useful life of the investment, consistent with the investment’s most current alternatives analysis if applicable.
Philosophies of Information Technology Investment
There are a few schools of thought when it comes to how you spend your money on IT as a business owner. While it is becoming more and more apparent that spending on technology is a necessity for any business to survive, it’s how you spend it that ultimately matters. Here are the three philosophies of information technology investment, and what they mean for the future of your business.
- Depreciating Asset: reactive approach to your investment in technology. Technology projects are continuously put on hold because management does not have the bandwidth to manage them AND the day to day operations to drive revenue. These companies inevitably get pushed out of business because all they have focused on is surviving and they cannot compete with even the simplest of competitors that have figured out how to maintain their technology so it does not damage their overall productivity.
- Cost Center: IT department as a cost center. Management is willing to make investments in technology as long as the direct result is that employees can do their work (without consideration to productivity) and that the company is not at any major security risk. While this seems to make sense, there is no real idea of how these discrete investments are negatively affecting your overall infrastructure. The reality of the situation is that management continues to dump money into IT infrastructure, but only to PREVENT a loss in production or a major catastrophe with no real thought going to how to improve your systems in order to drive company goals. While this company not going to lose to the depreciating asset company, it is fighting for scraps at the table with no real potential of ever truly competing outside of its current customer base.
- Appreciating Investment: decision to have technology to help drive business. A team is put in place that provides the company with a competitive advantage in the marketplace. The competitive advantage is that this team is efficient enough at performing the functions of the IT department (day to day support, security, stabilization) so that the management can focus on the revenue generating aspects of the business. They provide vital data about technology to help drive better decision making and help prioritize the projects that will have the most impact across the company. They have instituted a Project Management System that sets clear, tangible deliverables for each project and can be monitored by all stakeholders as projects move through each stage of the process. Investing in IT infrastructure is made to ultimately optimize the productivity and profitability of the system. These are the companies that grow.