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Poor IT investment choices are driven by personal gain

Antony Adshead
IT investment processes are inefficient, largely governed by personal gain and do not meet business requirements, according to the results of a survey published last week by the Cranfield School of Management.

The survey, which was carried out among 105 senior staff with IT purchasing power ranging from £500,000 to more than £10m per annum, found that 37% of respondents believe IT investment appraisal to be "poor". Also rated as poor was the assessment of business benefits (47%) and the assessment of the implications for business change (67%).

Eighty-five per cent believed the IT investment appraisal process is governed by personal and political aspirations and that management's championing of projects is aimed at chalking up impressive CVs.

The report said senior managers appear uninterested in managing IT investment and instead leave it to technical specialists.

One of the report's authors, Rob Lambert, senior lecturer in the IS department at Cranfield, called for a greater role for IT representatives on the board. "A lot of IT departments report to finance. Having a post on the board, reporting to the chief executive, would help the business see how technology can deliver benefits.

"The central problem is that investment appraisal is not efficient and not enough effort by senior managers to link IT investment to a business case."

The best way to address the problem, Lambert said, is for IT departments to "work like an internal consultancy, clearly identifying business benefits and leveraging IT to achieve them".

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