Economics of cloud computing for enterprise IT
IBM Journal of Research and Development
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IT executives frequently must be able to communicate IT's value in real economic terms, characterizing how technology infrastructure financially benefits the business relative to the company's financial performance objectives. Traditionally, the approach taken has focused on the capital investment process, with return on investment being the primary metric. However, ROI approaches identify financial results pertaining to a specific project, rather than IT programs as a whole, and can be misleading. A new financial metric, return on infrastructure employed (ROIE), has economic and real practical meaning to senior executive management because it recognizes IT as both an asset and a service. ROIE is a new financial management tool with which to judge the business contribution of IT as a whole; using it can motivate management behaviors and disciplines that are essential for success in the modern-day information economy.