In today’s difficult economic and business climate, organisations cannot tolerate the high rate of failure of IT projects that recent surveys show still prevails.
To increase the value gained from IT, and also improve the perception of IT in the organisation, the first step is to stop doing projects that deliver few, if any, benefits by better identification of the benefits that can be achieved.
The second step is to engage the active involvement of senior management and other business stakeholders in the governance of the project, and make them responsible for the activities that will deliver those benefits.
Given that the purpose of investment in IT is to achieve business and organisational benefits, it is surprising that so few organisations attack the enduring issues preventing these from being realised.
Approaches to actively managing benefits have been around for 15 years or more. Our studies have shown that those organisations which achieve success in the majority of their IT investments have implemented many of the core elements of a "benefits management" approach. Of those elements, the ones that make the most difference are:
- Ensuring business managers identify the benefits they want or expect from the investment and the changes needed to achieve them, rather than leaving this to their IT colleagues or other specialists;
- Most business benefits do not arise from implementing technology, but from the changes to processes and working practices that IT enables. These changes should be identified by business managers and professionals, who then become responsible for ensuring the changes are made successfully;
- The benefits claimed need to be evidence-based, both in terms of their value or magnitude, and how they can be achieved, which changes produce each benefit and who will ensure those changes happen and the benefit is achieved;
- How success will be assessed should be stated clearly and measures put in place to track progress towards achieving the expected benefits and to confirm, or otherwise, their eventual realisation;
- Post implementation reviews should be systematically carried out. These reviews should include time, cost and quality reviews, but also the benefits that have been achieved, to understand the causes of success and failure and improve the quality of future business cases and the organisation’s ability to deliver them.
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While delivering more benefits is important, cost containment is a high priority for many organisations in the present climate. Our research has shown that a focus on understanding the benefits and how to achieve them can also reduce the overall cost of IT investments. For example:
- Robust identification of benefits highlights investments that will not yield sufficient benefits to justify the cost, and these can be stopped before significant sums are wasted;
- Adopting a benefits management approach has enabled some organisations to appreciate they can realise significant benefits simply by making changes to working practices to use their existing IT better.
Having a coherent and comprehensive approach to identifying and realising the benefits of IT investments is essential to ensuring IT contributes maximum value to an organisation. However, this cannot happen unless business managers and IT specialists work together and share their knowledge and expertise.
Benefits management processes, tools and techniques have been adopted by many organisations, because they provide a comprehensive, yet commonsense, approach that both business managers and IT specialists can easily understand and use together.
John Ward and Elizabeth Daniel are authors of Benefits Management: How to increase the business value of your IT projects (second edition), from John Wiley & Sons. ISBN-978-1-119-99326-1.
This was first published in March 2013