The Next Leap in Productivity: What Top Managers Really Need to Know about Information Technology

3.1. If You Are Not an Asset, You Are a Liability

In too many businesses, information technology (IT) is still regarded as a cost, like the gas or electric bill.

This view of IT is dead wrong. It leads to faulty assumptions and poorly set priorities. It reflects a profound and potentially fatal misunderstanding of the nature of business in the twenty-first century.

So let's just state the honest truth: Companies that view IT as a cost, rather than as a fundamental embodiment of the business itself, are doomed to failure.

Even if your company has the smartest chief information officer (CIO) and the best IT department in the world, its efforts will be fruitless if it treats IT as a cost and not an asset.

An asset, by common definition, is a benefit—assets are expected to generate future net cash flows. Assets are the source of future economic gain. If you are running a business, you do not treat your assets lightly—you take care of them, you coddle them, you protect them, and you value them. They are your future.

Sadly, many conversations between the CEO and the CIO go like this:

CEO:

We've got to cut costs another 3% to meet our quarterly earnings projections or the analysts will hammer us. Which IT projects can you kill or put on hold?

CIO:

I'll get you a list this afternoon.

Now imagine the CEO is the defendant in a trial and he is talking to his lawyer:

CEO:

Gee, this is getting more expensive than I thought it would. Do we really need all these expert witnesses?

Lawyer