IS Performance - A Day Late, a Dollar Short

The overall performance of the IS function in delivering quality and value-added resources in a timely and cost-efficient manner has been abysmal. So says one Greg Hackett, president of The Hackett Group, a benchmarking and management consulting firm in Hudson, Ohio. Hackett's comments come as the firm recently released a set of findings from its benchmark database of close to 1,300 companies.

Among the most damning numbers to emerge from the database: The average company completes only 37 percent of large IT projects on time and just 42 percent on budget. Even for short-term projects-defined as those of less than 30 days' duration-the on-time/on-budget rate is only about 80 percent.

And speaking of budgets, the research shows that little more than half of companies' investments in application-software development is directed toward supporting the revenue-generating functions-manufacturing, operations, sales, distribution and such. As much as a third of current IT investment goes toward rebuilding administrative and support functions.

Companies in The Hackett Group's benchmark database, launched in 1990, range in size from $30 million to US$44 billion in annual revenues. They respond to detailed questionnaires covering costs, staffing, productivity and operating practices; The Hackett Group uses the results to set benchmarks and evaluate knowledge-worker functions in finance, human resources, IT, planning and procurement. In return for their participation, client companies receive a report comparing their performance against the database.

Among other striking findings from the database:

-- IT staff spend more than three days a week-almost 70 percent of their time, on average-keeping up with day-to-day operations. Only 8 percent of IT staff are focused on decision support, or thinking about the future leveraging of technology for strategic advantage (see "Where the Time Goes," above).

-- Executive leadership of IT is increasingly recognized as key to realizing the function's strategic value and managing its cost growth. Some 87 percent of companies participating in the study have a CIO, and 75 percent of the time, the CIO reports to the chief financial officer.

-- The IT organization in the average billion-dollar company supports 2,794 end users-about 60 percent of the total employee population. However, more than a third of companies in the database have end-user populations representing nine out of 10 employees. These tend to be the companies with a high degree of embedded technology in products and services.

For the rest of the study-the compelling, the reassuring and the downright depressing-visit

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