The analyst firm said companies need to be more ruthless with IT projects to improve the current situation. It estimates two-thirds of technology investments fail to achieve their intended result.
IT directors should undertake regular reviews of IT projects with a view to stopping, within the first 60 days, any project that they cannot confirm will have a realistic expected payback, said John Mahoney, managing vice-president at Gartner.
“Companies should expect to terminate about 25% of IT projects in this way until at least the end of 2005,” he said.
“It is an opposite approach to saying ‘I’ve started so I’ll finish’. Unless you can prove the business value of the project, the default [under the advised approach] is to say the project will stop.”
A major reason why companies fail to maximise value from their IT investments is that the value IT leaders deliver is inadequate or, in many cases, not recognised, Mahoney said.
“The dotcom crash and the economic slowdown have had a negative impact on the reputation of IT,” he said.
“The consequence of this has been threefold; business and IT still fail to communicate and, consequently, value suffers; the IT organisation is threatened and so are the careers of IT leaders. Unless this is tackled, threats to careers will be realised sooner rather than later.”
To help IT directors tackle this problem, Gartner has compiled a 10-step guide to achieving the business value of IT, which it previewed this week in advance of its Symposium in Florence next month.
These include improving the way IT investments and benefits are measured, so projects are judged on more than simply direct financial metrics.