The Framework for Enterprise IT Investment Management

The role of IT (information technology) in businesses has become more important, and IT investments in firms are steadily increasing every year. However, many firms do not appropriately evaluate IT investments and performance of IT assets. The following situation is very common. An IT section does not provide executives and directors of operations with enough information because it is hard for them to understand it. Therefore, executives and directors of operations entrust a handful of IT experts or an IT section with the matter. The situation above creates distrust between the IT department and the executives and directors of operations. It can be said that there is insufficient communication among the IT section, executives and directors of operations regarding the actual needs of the organization. In this paper, whilst recognizing the problem above, we discuss an actual framework for IT management in a firm, aiming for the mutual operational harmony among the IT section, executives and directors of operations. In the example of the firm which has 5, 000 employees, it has succeeded in establishing the mutual perception of assessment of IT investments and assets by applying the dual management cycle of a fiscal year cycle and each investment item. The firm achieved establishing the mutual perception by classifying IT investments and expenses as profit and loss based on the mutual understanding, and promoting the communication among the three groups by analyzing the IT assets from the value chain perspective.