Information and Communications Technology

 Go to the Information and Communications Assessment

What percentage of operating revenue is spent on information communications and technology - what is this money spent on?
Information, communications and technology (ICT) systems are essential tools of modern business. Companies like yours need to find ways to embrace and exploit ICT to provide competitive advantage, but at an affordable price. Many products are available in this area, but good judgement is needed to find the right one for you.
Key Issues
·         When buying ICT systems, you need to understand the lifetime cost of the product. This includes development of the specification, evaluating competitive tenders, purchasing hardware, software, and training, installation, commissioning, service charges, running costs, upgrades and maintenance charges.
·         Proposed new ICT solutions must be thoroughly evaluated to confirm they meet the business needs
·         Installation and running costs of computer systems can be significant:
o      Buildings and offices must be wired, checked and maintained
o      Computer hardware and software require service agreements
o      You will need to employ technical support people for managing the system and resolving problems
o      Utilities - electricity, insurance, security, backup devices
o      Peripherals - printers, scanners, plotters, writing tablets etc
o      Consumables - paper, DVD’s, memory sticks, ink cartridges
·         You will also need to consider environmental cost of ICT (electricity, paper, ink)
·         Allocating costs accurately can be difficult, but the cost of ICT systems in your company, as a percentage of operating revenue, is likely to be in the order of:
o      8% of operating revenue if you rely on computer orientated technology
o    For most other companies the cost approaches 2%.
o    The functionality of hardware and software is constantly increasing, whilst costs are static or falling, therefore you should review them regularly
o      The split of your ICT expenditure should be approximately:
o    a third on hardware including communication networks
o    a third on software and operating systems
o    a third on support services e.g. training, repair and consultancy
·         Some companies have outsourced their ICT requirements to specialist providers; this gives access to expertise but can be expensive
·         Prior to ‘Going Live’, new ICT systems must be thoroughly tested to confirm they meet the specification and satisfy the business requirements
Remember that computer systems depend on accurate data and this must be greater than 95% if the system is to provide meaningful information
Factors for Success      
Factors to  Avoid
1.     You only purchase reputable systems that other companies have used effectively
2.     You carefully select systems that fully support your core business processes
1.     Relying on the salesperson telling you what to buy without specifying your requirements
2.     Purchasing systems that are over- complex and too costly for your needs
Who does this apply to?
Senior managers and their support teams, ICT specialists
Realisable Benefits
A dynamic business, operating with lower overhead costs, increased efficiency and profitability and reliable information across the enterprise,


Investing in ICTInvesting in ICT

Investing in ICT

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Sharing information with customers and suppliers

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ICT training

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ICT expenditure