Behind Closed Doors:IT projects don't always mean business

These days everyone seems to want to present their projects as business initiatives. But when a project is pure IT with no ROI in...

These days everyone seems to want to present their projects as business initiatives. But when a project is pure IT with no ROI in the offing, it pays to be honest about it, argues Colin Beveridge.

If you have had a relaxing summer break with friends or family you are unlikely to relish the prospect of returning to work. Despite this, the last quarter of the year is the time when most of us have to sit down and review our business plans and priorities for the future.

By and large, the plans tend to fall into two broad categories: "business as usual" and "projects".

The first category, business as usual, naturally represents what we have to do just to keep everything ticking over for the time being, without changing anything substantially - except maybe the odd tweak here and there, for fine tuning.

The second category, projects, covers those investments deemed necessary to achieve the change agenda. Sometimes this budget is referred to as "discretionary" spending but this is an awful misnomer, too often applied to routine projects that really should be part of the business as usual stream.

Classified information
Does it matter, though, if we don't categorise our plans properly? Yes, because it means that we regularly find essential IT projects are deferred or cancelled as part of a crackdown on discretionary spending, a fact which should start a few alarm-bells ringing.

Some of you are probably saying that trendy modern mantra "there is no such thing as an IT project any more - they are all business initiatives". This opinion has been widely mooted in recent times and found support from some surprising quarters. However I strongly
"Nobody expects a return on investment from their physical infrastructure - it's just part of the corporate overhead, a cost of doing business and accepted as such"
Colin Beveridge
disagree and have had more than one heated debate with some very senior IT decision makers who are desperate to pin a "business investment" tag on pure IT projects. "If it doesn't give us a return on investment, we won't do it," is their proud boast.

The floor in the argument
At this point I usually ask them how the ROI figures are looking for the carpet in reception. After they have leaned forward to detect any lingering smell of strong drink on my breath they look extremely puzzled and ask "how can you get an ROI from a carpet?"

I then have to explain that the carpet in reception is very much like most IT infrastructure - everybody in the building uses it, without a second thought, and it needs replacing regularly to preserve functionality. But, unlike IT infrastructure, nobody expects a return on investment from their physical infrastructure - it's just part of the corporate overhead, a cost of doing business. Business as usual, in fact, and accepted as such.

That's why I get so annoyed with people trying to tell me there is no such thing as an IT project. I can think of three clear-cut situations where projects are exclusively non-business initiatives: infrastructure renewal, infrastructure rationalisation and data re-engineering.

Infrastructure renewal falls into the same category as the reception carpet and refers to the routine replacement of components that are worn out, or obsolete. Nobody worries too much about the regular renewal of physical infrastructure - it just seems to happen. More accurately, it happens because the facilities manager has a budget for routine maintenance that is not subject to minute scrutiny by all and sundry, unlike most IT budgets for infrastructure renewal which get shuffled around until somebody finally says "No!".

Storing up trouble
Subjecting IT infrastructure renewal to a completely different regime is why so many companies have a major headache every four or five years when they finally face up to the fact that their technology has become expensive and difficult to sustain, due to its age.

I discovered a clear example of this the other day when I was doing some research. In July 2001, a public body openly admitted "the best value review of our IT service shows that the authority operates with a considerable amount of outdated computer equipment, at best unfit for purpose, at worst obsolete." This dreadful predicament was recorded less than 18 months after the Year 2000 date roll-over when most organisations probably had their most up to date infrastructure for decades.

Why does this still happen? Because, in spite of everything, we have not got to grips with the concept of a pure IT project. Too many of us seem to aspire to the role of "bottom-line savvy" businessman and are neglecting the mundane, less-exciting, corporate plumbing role.

IT spending laid bare
Don't get me wrong, there is nothing wrong with taking a commercial attitude to our technology management but please - let's be honest with ourselves and recognise that not everything we do can give us a genuine, direct return on investment, so we should all stop trying to dress up our plans to make pure-play IT projects appear as business opportunities.

Here are my three steps towards improving IT budget honesty:
  • Admit that infrastructure renewal, infrastructure rationalisation and data re-engineering are all part of the continuous improvement cycle within the data centre - and nothing more than prudent housekeeping really. Our business colleagues should not even be aware that they are happening, quietly in the background, behind closed doors.

  • Stop falling into the trap of inventing perceived business benefit for every project plan - just to get approval. Over the years, I have seen all sorts of convoluted claims put forward to support IT project investments. Some have been well-intentioned but most have been ill-conceived, serving only to get the proposal financial approval. Typically these claim benefits that are un-measurable from an objective perspective and are, therefore, undeliverable. If you can't deliver a benefit, you can't claim it.

  • Make sure that you always include your pure-play IT projects in your business-as-usual budget, spreading the cost over a realistic product lifecycle. If necessary, you should build up a "credit balance" so that when you need to invest, the cash is there waiting. No more going cap in hand every four years for a desktop upgrade.


What's your experience?
Does your organisation make a clear distinction between "business as usual" and "project" IT spending? Let us know with an e-mail >>

CW360.com reserves the right to edit and publish answers on the Web site. Please state if your answer is not for publication.

Colin Beveridge is an interim executive who has held top-level roles in IT strategy, development services and support. His travels along the blue-chip highway have taken him to a clutch of leading corporations, including Shell, BP, ICI, DHL and Powergen.
This was last published in August 2002

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