Dan Chappell / Sam Kane
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MICRO FOCUS STUDY REVEALS I.T. SYSTEMS ARE THE LOST CORPORATE ASSET
· Less than half of CIOs and CFOs ever try to quantify the financial value of their IT Assets
· Nearly two thirds (60%) do not know the size of their core software assets
· One third do not know what they spend on their software assets
· More than half (56%) think the real financial value of core software assets is ignored or poorly evaluated compared against brand, property and intellectual property values
Forthcoming INSEAD study to act on evidence to assess business value of hidden technology investments
NEWBURY, England, 1 st October, 2007 - Micro Focus® (LSE.MCRO.L), a leading provider of enterprise application management and modernization solutions,today exposes that global organisations generally do not know nor measure the value of their IT assets and the contribution those assets make to the business.
Results of research by Micro Focus carried out amongst CIOs and CFOs across five countries (France, Germany, Italy, UK and US) highlight how the size and value of IT assets are being ignored by the world's leading companies, compared to other regularly measured corporate assets such as cash, brand, property and intellectual property.
Micro Focus research, carried out in companies with revenues from $100m up to over $1bn, shows that less than half of all CIOs & CFOs (48%) ever try to quantify the financial value of their IT assets. Only 37% of CIOs have tried, compared to 60% of Finance Heads. Less than a third of all respondents (29%) from both groups, ever try to quantify the contribution all their IT assets make to the business' performance.
The research found that nearly two thirds (60%) of CFOs & CIOs do not know the size of their core software assets, whereas a third (29%) do not know what they spend on their core software assets each year. Even more concerning is that this figure comprises a third (29%) of Finance Heads.
German respondents have more knowledge of their software assets than any other region. 60% of CIOs and CFOs in Germany say they know the size of their core software assets compared with 52% of US respondents, 40% of Italians, 36% of French and only 12% in the UK sample.
The UK is on the same level as Italy, where only one in five businesses try to quantify the contribution all IT assets make to their business' performance, compared to one in two US businesses and roughly one out of three French and German businesses.
Over half of all respondents (56%) think that the real financial value of their core software assets is either totally ignored or poorly evaluated compared with other assets including brands, property, and intellectual property.
"Given that global IT spend last year alone was over $1 trillion , this research is a wake-up call for all of us in business. This Micro Focus study shows many companies are ignoring the value of core business applications. The huge scale of IT spending in companies flags a critical issue for Company Boards and Shareholders alike" said Stephen Kelly, Micro Focus CEO. "If organisations do not know the cost and value of IT assets, then they must be severely challenged to make the right IT investment decisions moving forward."
This independent research  surveyed 250 respondents across France, Germany, Italy, UK and US, comprising 50% CFOs & 50% CIOs at companies with revenues from $100m up to over $1bn. Respondents surveyed included CIOs & CFOs from manufacturing, financial services, and retail sectors amongst others. In May Micro Focus announced that it has commissioned INSEAD, a leading international business school, to investigate approaches to calculating the value of legacy IT assets. The results of this research project will be available in November.
"This new evidence points to the fact that the size and value of IT assets, especially software assets, is clearly under-recognised compared to other corporate assets in the world's largest companies, and too little resource is dedicated to evaluating their contribution to business performance," said Professor Soumitra Dutta, Chair of Business & Technology at INSEAD. "This is an issue that must be addressed if the potential of technology is to be truly realised in corporations."
This extensive research follows a KPMG/Micro Focus study in May 2007 which revealed 90% of leading companies failed to attribute value to IT investments in their annual accounts.
About Micro Focus
Micro Focusprovides innovative software that allows companies to dramatically improve the business value of their enterprise applications. Micro Focus Enterprise Application Modernization and Management software enables customers' business applications to respond rapidly to market changes and embrace modern architectures with reduced cost and risk. For additional information please visit www.microfocus.com.
Micro Focus is a registered trademark of Micro Focus. All other products and companies mentioned in this announcement are the trademarks of their respective owners.
NOTES TO EDITORS:
• Less than half (48%) of respondents ever try to quantify the financial value of their IT assets
- Only 37% of IT Heads have tried compared to 60% of Finance Heads
• Less than third (29%) ever try to quantify contribution all their IT assets make to their business' performance
- Finance Heads are nervous with only 10% of those who try confident of their quantification
• Nearly two thirds (60%) don't know the size of their core software assets
• A third (29%) don't know what they spend on their core software assets on an annual basis
- A third of Finance Heads don't know how much they spend!
• 56% think the real financial value of their organisation's core software assets are either totally ignored or poorly evaluated compared with other assets such as brands, property and intellectual property
- 60% of Finance Heads think this compared to 47% of IT Heads
"Do you know the size of your core software assets?"
• 250 respondents across France, Germany, Italy, UK and US - 50% Finance Heads and 50% IT Heads (not from the same company)
• All companies had revenues of $100m - 51% turnover $1bn+
• Sector breakdown
- 25% Manufacturing
- 19% Financial services
- 11% Retail
- 11% Distribution & wholesale
- 11% Utilities & telecoms
- 23% Other
 Source: IDC Jan 2007; IT spend $1.16 trillion in 2006
 Research carried out in partnership with research organisation Vanson Bourne