TechnologyAccounting SoftwareROI not key to IT spending, says Intel

ROI not key to IT spending, says Intel

Return on investment should not be the key benchmark in deciding much of a company's IT spending, according to Intel's chief information officer Douglas Busch.

Link: Gartner sees IT spending recovery

IT infrastructure costs are simply part of the costs of doing business in an increasingly wired world, he said.

‘There’s a certain level of IT spending that isn’t concerned with ROI but with just being there as a public ally traded company,’ said Busch.

‘Regardless of the business climate IT spending will rise. If you’re growing you need IT facilities installed faster as people join – so growth is steeper than revenue growth. If revenues are flat IT spending rises to help improve margins, while in declining markets revenue spending rises to try and get reductions in fixed and variable costs.’

Mark Darvill, director of technology for IT services and integration company Logical UK, said the relationship between IT spending and business success is more complex: ‘That’s a little over simplistic – there are a variety of cost considerations for infrastructure spending.

‘For example, network speed is a ROI decision. If you use Intel’s argument you’d always choose the fastest options irrespective of cost. But do you really need gigabit links everywhere?’

In 2000, Federal Reserve economists found about two thirds of US productivity gains were linked to IT spending. In February, Federal Reserve chairman Alan Greenspan indicated that this seemed to be holding true throughout the first two years of the downturn.

Related Articles

5 key tech innovations helping accountants transform their businesses

Accounting Software 5 key tech innovations helping accountants transform their businesses

3w Heather Darnell, Founder of Ask the BOSS
Finance and the tech foundation: what’s needed to deliver impactful business insights?

Accounting Software Finance and the tech foundation: what’s needed to deliver impactful business insights?

3m Workday | Sponsored
Best accounting software for businesses in the UK

Accounting Software Best accounting software for businesses in the UK

3m Accountancy Age, Reporters
Making sense of enterprise tech concepts for finance teams

Accounting Software Making sense of enterprise tech concepts for finance teams

4m Workday | Sponsored
Open Banking: what you need to know

Accounting Software Open Banking: what you need to know

4m Edward Berks, Xero
Accountancy in the digital age: Flexibility, agility, efficiency

Accounting Software Accountancy in the digital age: Flexibility, agility, efficiency

6m Pegasus Software | Sponsored
Sage purchases Intacct in its largest ever acquisition

Accounting Software Sage purchases Intacct in its largest ever acquisition

10m Alia Shoaib, Reporter
5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

10m Alia Shoaib, Reporter