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Proving the value of IT - Part one

It's no easy task, but CIOs are discovering the right approach leads to both tangible and intangible benefits

Value. It’s a powerful word at the best of times. It can mean cheap and simple or large and complex — and everything in between — and all meanings are positive, depending on your point of view. When the word ‘value’ comes up in focus groups, brand managers are wont to smile wryly and consider their job done. Happy days.

Add ‘IT’ as its prefix, however, and suddenly, this fabulous term with all its positive connotations becomes fraught with uncertainty, despite enterprise over the years gaining critical business and competitive advantage from information and communications technology.

Why? The answer arguably lies in the relatively poor track records of many IT projects over the last two decades. We’re not just talking about projects that have gone spectacularly and publicly wrong; Queensland Health’s payroll fiasco is one of the more recent examples.

For every high profile case that hits the headlines, many more smaller, equally unsuccessful, technology projects escape notice. And to the chagrin of many a CIO, the IT department inevitably wears the blame, regardless of the part it played in the failure.

Read more about IT leaders in CIO Australia’s Management category.

Most CIOs feel their organisations see project delivery as an IT capability rather than a business capability — and they know it affects their position within their organisations. Research by organisations such as Standish, PricewaterhouseCoopers, KPMG and Gartner shows a consistent theme — the efficiency of IT project delivery is poor and the effectiveness is unknown.Perhaps even more tellingly, a study by the CIO Executive Council in Australia and consultancy Capability Management, Shifting focus, shifting results looked into the impediments to generating value from IT projects and found 92 per cent of CIO respondents agreed with such findings. The sentiment is perhaps best articulated by Westpac’s group executive for technology, Bob McKinnon when he outlined the banks’ IT strategy and strategic investment priorities.

“Large bank projects don’t have a great history in this organisation, or in this country, of success,” he says, adding the key driver for his group are the business priorities, not the technology.

McKinnon’s comments may have been industry specific, but could just as easily be applied to a raft of verticals. They highlight two key points in what has come to be known as the CIO paradox: CIOs are accountable for project success, but the business has project ownership, and while the many successes are invisible, the few mistakes are highly visible.

Read Part 2 in CIO's IT Value series, The Business Case

Download the joint research by Capability Management and the CIO Executive Council.

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More about GartnerKPMGPricewaterhouseCoopersQueensland HealthWestpacWestpac

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