Global Survey Reveals Late IT Projects Linked to Lower Profits, Poor Business Outcomes
A survey of 1,125 information technology professionals based in the Americas, Europe, the Middle East and Asia-Pacific reveals a clear link between slower delivery of IT projects and services and lower business profitability.
The recently released study conducted by The Economist Intelligence Unit on behalf of HP identified unacceptable levels of IT delays. In nearly half of companies surveyed, 25 percent or more of IT projects are delivered late; and in 57 percent surveyed, no more than one in two IT initiatives produces positive business outcomes.
The primary consequences of such delays include delayed product launches, loss of anticipated revenues and delays to planned cost savings – all of which impact company profitability.
“In business, speed is increasingly of the essence. It is cause for alarm then that so many of those surveyed deliver IT projects late,” said Denis McCauley, director, Global Technology Research, The Economist Intelligence Unit. “Companies that succeed in accelerating IT project and service delivery have a significant advantage, while those that do not may suffer at the hand of the competition.”
In those surveyed firms where 75 percent or more of IT initiatives in the past three years have had a positive business outcome, improvement in the speed of service delivery has been considerably higher than the average. In high-performance firms – those reporting a rise in profit of 25 percent or more over the same period – speed of service delivery has also improved more than in others.
The survey showed that accelerating speed of delivery does not have to aversely affect quality or positive business results. When project overruns do occur the culprits are usually midstream changes to business priorities and poor coordination between IT and business managers. Better definition of business requirements, greater investment in IT process automation and more collaboration across IT functions are the primary solutions for accelerating time to delivery.
“The new reality is that technology doesn’t just support the business – technology powers the business. IT risks are now business risks,” said David Gee, vice president of marketing, Software, HP. “Today, CIOs are measured on overall business outcomes such as how fast they can help the company launch new products and bring new distribution channels online. It’s no longer just about delivering only on technology service-level agreements.”
Survey highlights and background
The EIU whitepaper, “Technology at the Speed of Business,” is available for download at www.hp.com/go/software .
This research was prepared in cooperation with the Economist Intelligence Unit. The author of the report was Terry Ernest-Jones, and the editor was Denis McCauley. The report is based on the findings of a survey of 1,125 IT professionals based in the Americas, Europe, the Middle East and Asia-Pacific.
Questions and global findings highlighted in this release include:
* “Approximately what percentage of IT projects undertaken in your company over the past three years has been delivered later than originally planned?”
0% of projects = 9%, 10% = 43%, 25% = 24%, 50% = 13%, 75% = 7%, 100% = 4%
* “My company would experience a substantial increase in profitability from the faster delivery of IT services and projects”
Agree 62%, Disagree 29%, Don’t Know 9%
* “What have been the most common consequences of late delivery of IT projects in your organization?”
Delayed launches to new products/services 41%, Loss of anticipated revenue 37%, Not making planned cost savings 34%
* “Approximately what percentage of IT initiatives undertaken by your company in the past three years has had the intended positive business outcomes (impact on your company’s business?)”
0% of projects = 1%, 10% = 19%, 25% = 17%, 50% = 20%, 75% = 27%, 100% = 16%
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