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Morgan Stanley Research Says U.S. Companies Wasted Billions on Technology in Last 2 Years

USA Today reported that economic researchers have concluded that major companies in the U.S. have spent billions of dollars on technology that is later determined to be wasted. The article emphasizes rather spectacular estimates made by a brokerage house and an IT consulting firm:

Morgan Stanley estimates that U.S. companies threw away $130 billion in the past two years on unneeded software and other technology, according to its study of 25 years of tech spending. Worldwide, companies waste as much as 20% of the $2.7 trillion spent annually on tech, estimates research firm Gartner, which is based in Stamford, Conn.

This is probably the passage that will be quoted most frequently, but it's not the articles most salient point. The article goes on to say: "{The companies waste the money because} they stampede into the wrong technology, experts say. They buy too much and don't implement new tech properly. They also underestimate the time needed to make it work. And CEOs, especially during the go-go years, often spent too quickly without clear goals."

These have been the key problems since the dawn of the PC era, and they will not really be solved by cutting corporate IT budgets to the bone. The answer is not dramatically less buying, it's dramatically smarter buying. It's not banning consultants, it's using consultants where performance savings or increased profits can be predicted and successfully measured.

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