Do You Know Breaking Down IT Investments?

Do You Know Breaking Down IT Investments?

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You can see Know It down investment.  It has been suggested that rather than treating IT investments as monolithic entities, the nature of IT investments that create business value should be explicated. Both IT capital stock and IT budgets represent aggregate spending on IT. Examining IT budgets is important in an environment of accelerating technological obsolescence and in which current expenditure has a significant role in producing short-term business benefits. Examining the relationships of these aggregate IT investments with business and intermediate performance allows us to assess whether or not IT investments are producing any positive effects on organizations and enables us to specifically identify where such value is accrued. 

Following from our second objective, we moved to a finer level of granularity by examining the effects of investments in key elements of IT infrastructure. IT infrastructure has generally been defined as including hardware, software, development environments, shared databases, common applications, and human skills and expertise.

The deployment of IS budgets by business organizations can reflect deliberate management strategies to influence firm performance. We broke down IT budget into key elements of IT infrastructure: hardware, software, telecommunications, and IS staff. Shifting from centralized to client/server computing can result in efficiency gains for an organization. In client/server environments, the client needs to formulate only the request for data and, subsequently, process the reduced dataset returned by the server.

Thus, cost reductions due to improvements in the use of computing resources by the client may be observed. If properly designed, the client/server architecture moves substantially less data through the network. In environments in which larger legacy systems are being replaced, the aggregate costs of network-based servers are often less than the cost of the operating system, application software, and hardware and maintenance costs of their big-iron cousins. The incremental of expanding the networks can also take place in smaller steps. Client/server systems can often be built with off-the-shelf tools that take advantage of up-to-date graphical user interfaces. Such systems can mean quicker response time to user requests, faster completion of system projects, and reduced need for overtime.

Further, client/server systems are viewed as being able to deliver the requisite information to empower users—a central tenet of business process redesign.

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