Firms waste £3.5bn a year through poorly managed IT investments

UK businesses are failing to maximise the value of their IT investments, potentially wasting £3.5bn a year, says consultancy KPMG.

UK businesses are failing to maximise the value of their IT investments, potentially wasting £3.5bn a year, says consultancy KPMG.

Research among 125 IT decision workers, undertaken by Information Age magazine and KPMG, shows that businesses are routinely failing to maximise the value of their investment in IT, potentially wasting up to £3.5bn a year in the UK.

In the survey, respondents said nearly a third of IT projects fail to deliver the expected business benefits, and almost half of projects overrun. As a result, almost 90% believe that IT is not delivering its maximum possible business value.

The research points to a lack of alignment between the IT agenda and the overall business agenda, as a reason for the failure to maximise value.

When asked if project planning was aligned to the business agenda, 73% admitted that they do not have a stringent portfolio planning and alignment process in place, with 32% indicating that projects are decided on an ad-hoc basis with no overall co-ordination between business and IT planning.

In addition, when making budgetary decisions, business management fails to appreciate the dual mission of IT, of supporting the business in day-to-day running, but also using IT to change and drive the business.

Almost 80% of participants do not separate "change" and "run" during their budget and planning discussions.

Richard Bhanap, head of IT strategy and performance at KPMG Europe, said, "IT adds most value to the company when there is a stringent planning process in place where business and IT management jointly agree on investment priorities."




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