Original URL: http://www.theregister.co.uk/2002/11/15/it_directors_unsure_of_tech/

IT directors unsure of tech benefits

But when were they sure about anything?

By IT-Analysis

Posted in e-Business, 15th November 2002 08:40 GMT

With tech budgets under intense scrutiny and vendors waiting with bated breath for a surge in spending, there's probably never been a better time to look at project success. According to a recent poll of IT directors from medium and large businesses, individually they will spend £37.7 million a year on some 45 annual IT projects for their business, but 80 per cent of them don't believe that these solutions will provide a competitive advantage to their firm.

There is an obvious question that begs to be answered - what is the definition of competitive advantage? Does it include profitability and efficiency gains for instance? We don't know and the study, undertaken by Winmark Research, doesn't seek to answer it.

Still, putting that aside, CIOs still aren't very confident about their work. 80% of them expect that their email and intranet systems will crash when they launch a new application. And only 6% of them think that the rest of their critical systems are safe from failure in that situation.

It's a sorry state of affairs but it seems that CIOs are fairly pessimistic about the likelihood of failure with their projects and systems. 65% of those asked said that their projects achieve less than 75% of their expected value. This could be because of a lack of understanding how to measure the value of course - those contentious soft benefits can still irk.

Failure to reap all of the benefits from a project, and failure of an entire system are completely different things. But each IT director polled said that they thought the average cost of system failure to their business was approximately £129,000 annually. That's just the cost of the failure itself too and doesn't include potential lost revenues or damage to reputation. For the IT directors, it's the lost revenues that concern them.

The study needs to be taken with something of a pinch of salt. It was commissioned by a change management software firm, Serena. Still, it highlights the problems and concerns that are to be found amongst tech buyers. IT projects have always been a controversial subject for the business. High failure rates, project over-runs, budget slippage, you name it, the tech project has had it. In today's tough economic climate though, it seems IT Directors are still unsure about their returns and until that improves, spending will remain dipped.

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