Many studies reflect a worrying shortfall in the benefits actually realised
by business from IT projects– that is when the financial system actually
provides such post-implementation information at all.
The causes of these shortfalls – typically lack of management support and
scope creep – will not surprise anyone. But while many of the problems come home
to roost late in the delivery of the IT project, the underlying causes occur
earlier; namely during the approval process.
Worryingly, our survey shows that in many organisations IT investment
appraisal is flawed: 47% of respondents believe the assessment and delivery of
business benefits is ‘poor’ and 36% do not believe the approval group displays a
deep understanding of the business.
We have been advising some of the 88% who say their organisations are trying
to improve programme management. While the development of a best practice method
for the development of business cases is exacting, it is only the beginning of
For example, a key requirement is to ensure the governance mechanism is based
upon effective practice. Can one expect senior members of the approval team to
digest volumes of detail in the usually inadequate timeframes? Does the approval
body revisit the programme at regular intervals during the execution phase?
What about politics and personalities – do they dominate the approval group
beyond logical analysis? Evidence suggests that such issues are critical to the
efficacy of IT investment appraisal, but are widely neglected.
IT is fundamental to organisational continuity and success. Rather than see
this as a threat to the reputation of finance, it is an opportunity for
Professor Chris Edwards is professor of Cranfield School of Management.
He will be presenting a masterclass at Softworld Accounting and Finance.
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