Businesses failing to benefit from IT

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Companies are failing to reap financial rewards from IT projects, research from the Cranfield School of Management has revealed.

Of more than 1,000 IT and business managers surveyed, 57 percent are not satisfied IT investments are adding value to the business and nearly a third can't say whether IT investments are benefiting the business.

Nearly two-thirds of respondents said significant improvements within corporations would be necessary in order to derive value from IT investments — the same figure from a similar Cranfield School of Management survey conducted 10 years ago.

So why are businesses stuck in this valueless void with IT? The survey found most enterprises do not make the kind of process changes — such as, for example, altering the organisation of IT projects — necessary to enjoy full financial benefits from the new technology.

Managers are not learning from their mistakes either, with four-fifths reporting that their review and evaluation of completed projects is inadequate.

Professor John War of the Cranfield School of Management said it's "disturbing" to find so little difference between the two surveys, conducted a decade apart.

He added that few organisations appear to be doing anything to increase the value they obtain from IT.

Talkback

Not to want to put too fine a point on it, but I feel this happens frequently because a clear target hasnt been correctly described up front.

Not so much in the technical specs ( both high and low level ), but rather in the benefits analysis of said projects.

Many projects have quite clear HOW components, but many are also quite vague on the WHY component.

I worked with some brilliant managers, who told me... " Its very simple. A business head will come to me and say 'I want 10 million dollars, I'll build a factory, and it will make 4 million dollars a year'. And then the technical team will come to me and say ' I want 10 million dollars, I'll spend it on streamlining our processes, and it'll make everyones life better. We also need the business to buy into this, but they should want it anyway, because they'll benefit down the road too'..."

In short, IT have a blinkered approach to outcomes.

via Facebook 7 October, 2006 02:37
Reply

IT for business is not just about getting a direct return on investment, it is about ensuring PEOPLE have the tools to do their jobs.

Lets have a look back a couple of decades.....purchase lists would look like... Desk, Typewriter, Stationary, Pens etc.

Today....Desk etc, PC, printer, stationary etc - a bit more costly, but ultimately empowers workers and saves a lot of wasted time and paper.

SO have we just substituted one kind of purchasing for another? I think so.

A business can NEVER benefit from IT unless it understands that it carries more INTANGIBLE benefits than tangible.

via Facebook 7 October, 2006 19:38
Reply

It only fails to benefit those businesses that regard IT as a kind of status symbol, converting a PC, for example, into an expensive but unnecessary replacement of a reliable but outdated typewriter.

But if one is making use of appropriate IT solutions because these are necessary to sustain business efficiency and growth, TANGIBLE benefits can always be expected.

Generally, IT does not cause failure in business; it's those persons running the show.

via Facebook 10 October, 2006 02:41
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