A survey of 259 software application developers at Fortune 1000 and other leading companies reveals that 37% of respondents noted that their companies’ management never (11%) or almost never (26%) calculates the return on investment (ROI) of developed applications. 42% of respondents point to lack of internal expertise as the biggest barrier to effective measurement of application ROI.

While 93% of respondents report it is clear how the software they develop helps their company meet business goals, their responses to other questions paint a different picture:

• The majority of respondents, 56%, are not systematically gathering information to measure application ROI;
• A large percentage, 26%, said management “almost never” calculates the ROI of developed applications, and 11% said management “never” calculates ROI;
• Almost half of respondents, 44%, do not think their CIO or management are asking the right questions to properly measure application ROI; and
• 42% of respondents cite a lack of internal expertise as the biggest barrier to effective measurement of application return on investment.

Commenting on the survey, Gabriel Torok, CEO of PreEmptive Solutions, said, “The results tell us that developers and management are three times more likely to be misaligned on business objectives when there’s no systematic approach to measuring application value.

This brings up interesting questions – Did the process of implementing application value measurement force dialogue and alignment? Or are companies where business and development organizations already aligned simply three times more likely to implement such a system? If it’s the latter, what do they know that leads them to such a stark contrast in behavior?”

Torok suggests the following steps in creating an effective system for measuring application ROI:

1. Invest in developing meaningful and consistent usage and impact metrics;
2. Tie these metrics to development, support and maintenance investment strategies. Usage and impact metrics must translate into smarter application portfolio management decision making and development resource utilization;
3. Incorporate application ROI management into broader business performance management practices. Success can only be assured when application asset management is fully integrated into operational and business performance management.

For complete survey results, visit www.preemptive.com/ROIsurvey.