Are Spreadsheets Really to Blame for IT's Inability to Prove Its Value?

CIOs, multimillion-dollar IT budgets and Excel spreadsheets collide to surface age-old business-IT alignment problems.

In a previous post, I compared the Excel spreadsheet to a cockroach, since no one who's wanted to has figured out a way to stop their corporate evolution. The principal issue, of course, is that we humans are fallible: We make mistakes that spreadsheets can't detect and correct.

Many companies, abetted by various vendor solutions, have sought to curtail spreadsheet use. Most of those projects have been futile: Users in finance, sales, marketing and supply chain functions just love their multi-celled document too much.

When it comes to IT budgeting processes, tracking apps spending and TCO management, CIOs also love themselves some spreadsheets, too.

That's according to new survey results which show that nearly half of CIOs use spreadsheets to manage multimillion-dollar IT budgets and track business-unit spending. That process, in part, leads to an "alarming disparity between the ability to track and understand how much it costs to deliver IT services to the business, and the value that information provides," according to the survey report, "Market Intelligence Report: CIO Survey on Total Cost of Ownership and Return on Investment for IT Services."

In turn, CIOs "have a limited ability to fully understand total cost of ownership within their organizations."

Before we dig a little deeper into the results, it's important to talk about the survey methodology and who paid for it. First, the survey base: In July, The World Executive Council (WEC) interviewed 50 of its U.S.-based member CIOs who represented a broad range of industries; the CIOs' companies have at least $250 million in annual revenues, though most have revenues over $1 billion.

Next up is the sponsor of the survey: Apptio, a vendor offering "SaaS-based technology business management solutions for managing the business of IT."

So, it's not a huge survey base and you'll have to grab your salt, and take as big a helping as necessary due to the vendor sponsorship. But the results do provide, at the very least, some critical thinking points on the age-old topic of business-IT alignment—and just how much a "technology solution" can help.

For instance, in the fast-changing economic environment in which all businesses play, it does seem reasonable that CIOs should have the ability to update IT budgets or quickly analyze various line-of-business (LoB) spending. This capability is more critical as daily and weekly events alter business priorities and strategies.

The survey results, however, show a different reality: "There is a lack of frequency and accuracy in reporting TCO for IT services. Nearly one-half of CIOs update their TCO for IT services calculations on an annual basis. None of the CIOs interviewed calculates TCO for IT services more than once per month." In addition, more than half (56 percent) of surveyed CIOs have no "regular communication processes regarding IT service cost and no transparency on the breakdown of their budgets based on IT services."

Furthermore, the report states, more than 60 percent of respondents said they weren't very confident of their department's ability to give the CEO or LoB managers an accurate answer—within 24 hours!—on specific, annual spending levels for IT services, such as ERP, e-mail and desktop systems.

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