Survey shows common IT woes persist

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June 23, 2003 (Computerworld) -- It's deja vu all over again at most companies when it comes to their track records in using IT to help achieve business goals.
Consider the following:

• At companies that aren't among the top 25% of technology users, three out of 10 IT projects fail on average.


• Less than 40% of IT managers say their staffs can react rapidly to changes in business goals or market conditions.


• Less than half of all companies bother to validate an IT project's business value after it has been completed.

Those are just a few of the findings from a survey of IT managers at about 2,000 companies, including more than 80% of the Fortune 1,000. The survey, which was conducted by The Hackett Group in Atlanta and is due to be released this week, rates the top 500 of those companies as "world-class" IT users. The rest of the pack is classified as "average."
"None of these results surprise me," said Bill Finefield, CIO at the Navy Exchange Service Command in Virginia Beach, Va. "Companies tend to build a great case for an IT project, and then they tend not to follow up to see if they achieved what they expected."
"There should be a very well-understood process around when and how IT is going to measure value," said Joyce Young, CIO at Wilmington, Del.-based CP Kelco. But equally important is how well IT communicates with business leaders, said Young, who works in the company's Chicago office. Many IT managers "don't have really strong relationships on the user side, and we have to say no a lot," she said. "Having a well-understood set of project priorities should help."
CP Kelco, which makes pectin and other thickening and stabilizing products used by the food industry, is implementing a portfolio management approach to tracking IT projects.
By far, the biggest factors separating world-class IT departments from the also-rans is their level of business alignment and the sophistication of their internal IT processes, according to Hackett analysts.
"Most IT organizations still look like a Rube Goldberg [machine]," said Allan Frank, a senior fellow at Hackett. "There's no underlying process model to them." For example, only 37% of the "average" companies have a formal IT program management office in place, he said.
Too many IT departments also lack a direct link to CEOs, Frank said. Hackett's survey found that less than one-third of CIOs report to their CEOs at businesses in the "average" category. At world-class companies, that figure is 42%.

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