CIO Wisdom II: More Best Practices

Typical Financial Calculations of Software ROI

We conclude with a review of a number of traditional metrics used to compute software ROI. This discussion is a quick refresher only—it is not intended to be a comprehensive introduction to the subject. Much of the discussion was derived from Raffo and colleagues (1999) and Morgan (2005); their works can be consulted for a more detailed introduction.

Activity-Based Costing (ABC)

Activity-based costing is an accounting strategy that considers the costs of people, facilities, computers, supplies, and other resources consumed. To the CIO, the goal is to show the rationale for investment in IT infrastructure by incorporating the costs of contribution from all parts of the organization that touch the ...