Original URL: http://www.theregister.co.uk/2004/06/28/offshore_savings/

UK IT departments waste £165m a year

Back to basics, and back to India...

By John Oates

Posted in Developer, 28th June 2004 12:37 GMT

IT departments are wasting £165m a year by failing to keep control of IT projects, under-using existing offshore resources and not keeping strategy in line with overall business strategy.

So says Business Engine, a supplier of IT project portfolio management software. It commissioned researchers to investigate return on investment at 30 blue chip healthcare, retail and telecoms companies over three years. It looked for areas within businesses that created the best return on investment.

The three main failings were: not taking full advantage of existing offshore resources, poor visibility and control of projects and a failure to properly align IT with business strategy.

Doug Dickey, CEO of Business Engine, said: "I've been doing this for 30 years and I've seen IT departments change - they used to be project-based, running sequential projects, now large companies have dozens of projects running at once and it's really hard for one person to keep track and remember why you're doing it. The complexity and volume of projects creates an atmosphere where you lose alignment with the business.You have to understand what the business needs, then provide it efficently."

He said many IT departments had processes in place for dealing with two projects - but are now trying to manage hundreds.

Intellectual capital costs consume nearly half the IT budget which is why properly-run offshore projects can create large savings. But such projects still need proper management to set specifications and processes and to keep them in line with overall business strategy, according to Dickey.

More details of the survey are here. ®

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