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CIO Executive Board Finds High-Performing IT Functions Can Increase Shareholder Value by 20%

WASHINGTON & NEW YORK--(BUSINESS WIRE)--May 22, 2007--The CIO Executive Board (CIOEB), a leading provider of best practices research, executive education, and decision-support services to CIOs, today announced the results of a path-breaking quantitative analysis which measures the impact of IT on shareholder value. The results are available to CIOEB members in the study, The Performance Payoff. The CIOEB is a membership program of the Corporate Executive Board (NASDAQ: EXBD) (http://www.executiveboard.com), the premier network for leaders of the world's largest public and private organizations.

Having substantially improved efficiencies in internal operations, CIOs face the daunting task of driving shareholder value. However, despite many attempts in the academic and business press, quantifying the value that IT brings to firm performance remains a conundrum. While CEOs, CFOs, and CIOs intuitively know that excellence in IT translates to better business outcomes, just how the IT function delivers its economic promise has heretofore remained difficult to ascertain. CIOEB worked with over 110 publicly-traded member organizations to build a proprietary econometric model which demonstrates the levers CIOs need to pull to drive shareholder value, with clear implications for Boards of Directors, IT funding bodies, and executive committees. Key findings include:

-- IT Does Matter: Overall competence in the IT function can increase five-year Total Shareholder Return (TSR) by as much as 20%, EBITDA by 11%, and free cash flow by 21%.

-- Almost Half Of All Companies Over Or Under-Invest In IT: A fifth of the organizations studied under-invested in IT: i.e., increasing IT spend led to an increase in TSR. Conversely, a fourth over-invested in IT - where a marginal dollar of IT spend actually decreased TSR. The study contains specific under-and over-invest IT budget thresholds for each major sector.

-- CIOs Own the Keys to Driving TSR: A cross-functional analysis of marketing, procurement, sales, and strategy functions shows that IT can excel on its own--i.e., independent of the maturity or competency of other functions within the firm. Therefore, the payoff for CIO investments in improving IT competency is not undermined by lack of excellence in other functions.

CIOEB Executive Director Shvetank Shah says, "CIO investments in talent management trump all others. Of 25 different competencies tested, the analysis shows the single most effective step that CIOs can take to improve IT's impact on shareholder value is to build the next-generation IT workforce. The study also demonstrates that CIOs (not HR) have leverage and ownership of the most critical staff performance and development activities."

The Performance Payoff study includes the underlying diagnostics and CIOEB's proprietary framework - Key Attributes of a World-Class IT Organization - that over 300 CIOs have used to benchmark the effectiveness of their IT function.

About the Corporate Executive Board

The Corporate Executive Board Company (NASDAQ: EXBD) is a leading provider of best practices research and analysis focusing on corporate strategy, operations, and general management issues. CEB provides its integrated set of services currently to more than 3,700 of the world's largest and most prestigious corporations, including over 80 percent of the Fortune 500. These services include best practices research studies, executive education seminars, management implementation toolkits, customized research briefs, and Web-based access to a library of over 300,000 corporate best practices.

CONTACT: Corporate Executive Board
Hollie Nelson, 202-777-5065
hnelson@executiveboard.com

SOURCE: The Corporate Executive Board