Business supremos stymie IT ROI

Lack of responsibility and accountability at senior management level means the business benefits of IT investments go unrealised.

According to a recent White Paper from DMR Consulting, IT has typically been viewed as a "cost instead of a strategic agent for business change" and IT investments have "mistakenly" been left to IT professionals to look after.

Bob Cox, IT manager, Anglo Coal Australia, agrees the success of IT investments should not lie with IT professionals.

"IT is responsible for technology delivery and support. Users are responsible for functionality, business implementation and business benefits."

Howard Malyon, IT manager, Grace Removals Group, said while it is possible to use IT professionals to help define how the investments should be made, IT professionals "do not have access to all the resources required to make the investment a success".

While this appears to be the prevailing viewpoint among IT professionals, Steve Tucker, group IT manager, National Jet Systems Group, argues that if IT professionals form the business case for a project, the investment success should rest with them.

"However, the IT professionals usually are not in the position of approving their own investments.

"Additionally, the IT professional can not or will not always appreciate other business issues which may be affected by their proposals and so other areas of the business may be involved to drive the business case."

Jeff Parker, author of the DMR White Paper, sees IT professionals as having a paradigm: "to budget, to scope, to time", that creates a way of thinking and doing that is not centred on the delivery of business benefits from investments in IT.

Parker believes this traditional way of thinking exacerbates the increasingly important role IT has to play in business change initiatives.

"In the early days, the primary application [of IT] was to automate work processes, which basically resulted in doing things quicker and more accurately. The next phase of using IT was to manage information, which led to improvement in decision-making and business processes mostly focused on the administrative and management domains.

"These phases have now led to a period where IT plays a prominent role in the transformation of business."

Nevertheless, it appears IT professionals are still unsure of the role they should play.

Greg Carvouni, CIO, New South Wales Roads and Traffic Authority, said he would not agree that IT people are benefits focused, "although some obviously are".

"Many IT people unfortunately are technology and sexy project focused and need to be controlled."

Grace Removal's Malyon disagrees that IT professionals still think this way, saying "you have to think about the business benefits for investments these days".

"One of the first questions asked is 'what is the ROI on this investment'."

Parker said current management processes are inadequate for dealing with the inherent challenges of benefits realisation, adding that new practices are required to bring about a fundamental change in managements' way of thinking about investments and benefits.

He said many studies of the past 10 years show that around 45 per cent of projects involving IT deployments fail to produce expected benefits. Reasons include cost overrun, poor project management, weak business case, no management support and inadequate governance arrangements.

"An enterprise-wide view of the impact and potential of IT is needed," he said.

Join the newsletter!

Error: Please check your email address.

More about DMR ConsultingRoads and Traffic Authority

Show Comments