Magazine article PM Network

Misalign the Bottom Line

Magazine article PM Network

Misalign the Bottom Line

Article excerpt

IT Projects Often Are Aligned Poorly With Business Goals.

Businesses are falling far short of getting IT budgets and projects to align with business goals, according to two recent reports by Butler Group, a U.K.-based IT research and advisory company. In many organizations, a mere eight percent of the IT budget is spent on initiatives that bring value to the enterprise, finds one of the studies, "Measuring IT Costs and Value-Maximising the Effectiveness of IT Investment."

"Those IT departments capable of measuring performance are in the minority," says Mark Blowers, Butler Group senior research analyst and co-author of the report. "Small wonder then that IT remains isolated, misunderstood and treated simply as a cost center by senior management. This absence of measurement means that most organizations have no idea whether investments in IT are providing increased efficiency, added value or competitive advantage."

IT departments must improve transparency and visibility of their projects, with accountability for performance related to organizational value drivers, Butler advises. In addition, IT managers must get their message across to stakeholders and internal staff. To enable this kind of communication, enterprise architecture tools, business cases and balanced scorecards should be used.

Butler Group notes that a cultural divide exists between the business and IT sides of companies, with business handing over requirements to IT-and the next contact between the two being made only when delivery is expected, according to the other report, "Application Lifecycle Management. …

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