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MICRO FOCUS STUDY REVEALS IT SYSTEMS ARE THE LOST CORPORATE ASSET

30% of US CIOs & CFOs never try to quantify the financial value of their IT Assets: Forthcoming INSEAD study to act on evidence to assess true value of hidden technology investments

NEWBURY, England - October 01, 2007

Micro Focus® (LSE.MCRO.L), a leading provider of enterprise application management and modernization solutions, today unveils evidence that global organizations generally do not know or measure the value of their IT assets and the contribution those assets make to the business. According to research conducted by INSEAD and Micro Focus, 30% of US CIOs and CFOs have never tried to quantify the financial value of their core IT assets. Despite these shortcomings, American organizations fared better than their international counterparts. Over half of global CIOs and CFOs have never tried to do so.

Results of research by Micro Focus carried out among 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 corporate assets such as cash, brand, property and intellectual property.

Micro Focus research, conducted in companies with revenues from $100m up to over $1bn, shows that globally, only 37% of CIOs have tried to quantify the financial value of their IT assets, compared to 60% of finance heads. Less than a third of all respondents (29%) from both groups, have tried to quantify the contribution all their IT assets make to the business’ performance.

The research found that nearly two thirds (60%) of global 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 almost a third (29%) of finance heads. In the U.S., nearly half are unaware of the size of core software assets, despite a vast majority knowing what they spend on core software assets. However, 58% of CIOs and CFOs in the US believe the real financial value of core software assets is ignored or poorly evaluated compared against brand, property and intellectual property values.

Only one in two US businesses try to quantify the contribution all IT assets make to their business’ performance, compared to roughly one out of three French and German businesses and only one in five businesses in Italy and the UK.

“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 organizations 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 among 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, are clearly under-recognized 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 realized 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.

[1] Source: IDC Jan 2007; IT spend $1.16 trillion in 2006

[1] Research carried out in partnership with research organisation Vanson Bourne

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About Micro Focus

Micro Focus provides 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.

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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.

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Micro Focus
Tim Brill, +44 1635 565364
Tim.Brill@microfocus.com
or
LEWIS PR
Dan Gaffney, 617-226-8844
microfocusus@lewispr.com

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MICRO FOCUS STUDY REVEALS IT SYSTEMS ARE THE LOST CORPORATE ASSET

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