THE BUSINESS BENEFITS OF IT STILL NOT BEING DELIVERED

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Companies are failing to capitalise on the business benefits from IT projects - and have made little progress in this area in the last 10 years.

These are the findings of a survey conducted by Cranfield School of Management, in association with Vlerick Leuven Gent Management School in Belgium.

In an era where value for money is the watchword the survey reveals that practices to deliver business benefits from IT projects are no more mature than they were 10 years ago.

Indeed, 57% of respondents (who were equally split between business and IT managers) reported that they are not satisfied that they are getting value from IT investments. What is perhaps more worrying is that 31% didn't know whether they were or not! Overall 73% said significant improvements were needed if their organisations are going to deliver satisfactory value from their IT investments. This is the same figure as 10 years ago!

The survey, conducted by Cranfield's Information Systems Research Centre and the Vlerick Leuven Gent Management School, questioned organisations in the UK and Benelux countries. The findings also highlight some of the reasons for the situation.

Whilst the majority of organisations plan in detail for the implementation of the technology, only a minority plan for the process and organisational changes required to deliver the main benefits enabled by IT (40% and 22% respectively). Planning for the delivery of business benefits themselves is also extremely poor - only 31% do it and the majority believe this is the area where most improvement is needed.

The survey also revealed that there has been a huge increase in the adoption of project management methods in organisations; 88% report having a formal methodology for managing projects versus 53% 10 years ago. While 70% of respondents also report having a project management office (PMO), the data reveals that the focus of the majority of PMOs is primarily on vetting expenditure proposals, monitoring project progress and controlling costs, with little emphasis on value realisation.

The responses suggest that in most organisations business managers are now putting in considerable effort to develop business cases for investment, although over 90% state the main purpose of the business case is to secure the project budget. However, 70% believe they are failing to identify and quantify the benefits adequately - 38% openly admit they often overstate the benefits in order to obtain funding! And 80% report that the review and evaluation of completed projects is also inadequate.

The analysis seems to suggest that there is an over-reliance on project teams to deliver IT projects successfully, not only the technical aspects but also the business changes and benefits. The data also indicates that organisations have undue faith in the business cases and that the deployment of formal methodologies gives managers a false sense of security, and perhaps an excuse for not becoming sufficiently involved.

Professor John Ward, who led the research, said: "Having carried out two similar surveys 10 years apart, it is rather disturbing to find that so little has changed. For all the talk about getting value for money from IT, it appears few organisations are actively doing anything to increase the value they obtain. Achieving business managers' ownership of the benefits, and commitment to making the changes needed to realise them, has long been known to be critical to success, but this does not seem to have improved in the last 10 years."

For further information on this survey visit: www.cranfield.ac.uk/som/isrc

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