As the economic slowdown bites, IT departments are being forced to demonstrate the cost savings that IT can bring to the business. Analyst group Gartner recently suggested that IT departments should take a "gap year" from new projects to squeeze greater value from their systems during the down-turn.
Achieving such savings may not be as simple as the gap-year idea suggests.
The prevailing trend in IT projects depends on integrating different systems - such as e-business, e-procurement, customer relationship management and portal implementations. All these depend on being able to get to data held in a common format and make use of it.
New research shows the extent of the challenge ahead. One third of businesses are wasting money on ineffective integration, according to a survey of 155 companies carried out by consultancy AMS. The wasted effort could run into millions of pound of IT budgets.
So where are firms going wrong?
Fundamentally, the problem is lack of focus. AMS found that 34% of organisations have no quantifiable objectives for integration and 40% do not specify when they expect payback.
Allied with this is the tendency to see only the quick fix solutions where a little forethought could reap bigger rewards.
Fewer than 40% of firms have a team dedicated to integration strategy and 25% of businesses have gone no further than simply buying some middleware to knit applications together.
The resulting picture is less than encouraging. Twenty-five per cent of businesses have done no more than achieve information exchange, never mind process integration and, as a corollary to this, only 5% of businesses have achieved any level of integration with business partners.
Nick Leyland, AMS director of enterprise integration, said, "Often people just don't understand the business case for integration. They get a gut feeling but don't generate a quantifiable business case and metrics.
"A typical scenario is that companies get half way through a multi-year project - spending freely on consultancy - and then realise they don't know where they are going with it."
So what is the best way to avoid the pitfalls? According to Leyland the answer lies in taking a holistic approach which ties together the overall intangible benefits with quantifiable project-level measurements, treating the time and cost spent on overseeing the project as an enduring benefit in terms of knowledge gained about the business.
He recommends an approach that works on two inter-connnected levels - what he calls the programme level and the project level.
The programme level is to do with infrastructure. Here the benefits are less tangible, difficult to quantify and difficult to put into one business case, but they can be identified - shorter set-up times on future projects, lower training costs and the benefits of a common interface are all positive results of a successful integration project.
A roadmap at the programme level should contain elements of the project level. It is in the separate projects that the business case and precise metrics can be elucidated along with a component of cost write-off at the programme level.
Alongside this Leyland recommends an approach which does not waste the knowledge gained in integration projects. Businesses need an integration team and should treat the knowledge resulting from such projects as a corporate asset. "All too often companies bring in outside help and when the consultant goes the knowledge goes," he said.
Consultants and analysts usually recommend a "quick wins" approach. It seems that integration is one area where this is not the best policy - at least not unless you have figured out a strategic plan into which those quick wins fit. But because almost all e-business projects need an integrated infrastructure to really work, it is worth getting the planning right.
How integrated is your business?
Where are you on AMS' scale of integration?
Level 1 - Point to point A basic data interchange infrastructure has been established between applications, each of which is custom built
Level 2 - Structural integration Use of more advanced middleware tools to standardise and control information between applications
Level 3 - Process integration The business has achieved a transition from sharing information between applications to managing data flow between them based on a common business model of processes
Level 4 - External integration The business directly connects customers and suppliers to its operational systems.