However, most IT organizations do not even have clear ways to calculate and communicate the direct benefits produced. Though these estimates are obviously not predictive, nor are they specific to any type of organization, the process by which we calculate this return can provide a framework an individual organization can use to better quantify and communicate the value of IT and begin to bridge the perception gap. In our conversations with both IT and top business management, it is clear that, in most organizations, there is often a difference of opinion regarding the contribution of IT to the overall growth, or increase in value, of the organization. This split is frequently noted and reported in many organizations. Such segmentation is also often the basis of the IT budgeting and reporting structure.
All business processes incur both maintenance and new investment expenses.
When segmenting the IT budget at a typical organization in this way, approximately 75 percent of the budget is spent maintaining and operating existing infrastructure, systems, and technologies. For most, this budget segment is perceived not to create new value to the organization. This is not to say that the systems being supported do not provide any value to the organization. In fact, as with corporate revenue, there can be significant turnover within this base. However, reaching the level of last year is assumed, regardless of the changes within the installed customer or infrastructure base.