Article at a glance:

A hard and soft look at IT investments

Hardware and software may be cheaper than ever, but hidden and difficult-to-predict costs, as well as the complexity of today's technology, make IT decisions trickier than ever. Many companies have responded by trying to calculate the "total cost of ownership," but though costs are important, IT decisions, like all others in business, must be based on value—including benefits, both "hard" and "soft." A traditional cost/benefit analysis customized to address the issues unique to IT investments can help you estimate their total value of ownership.

The take-away

Companies that make IT investment decisions solely on the basis of cost—instead of on the basis of value—run the risk of missing huge opportunities to create competitive advantage through information technology.