Speed is of the Essence

Feature Article | August 8, 2007 by SAP News

Today, the IT departments of large and medium-sized companies often find themselves in a conflicting situation. They are supposed to develop solutions and services at a faster pace and at increasingly short notice in order to create the basis for successful new business models and products. However, they are only rarely provided with increased resources. At many companies, IT budgets are stagnating or are being increased only very hesitantly. The study “IT at the Speed of Business” reveals that, as a consequence of this, IT departments cannot keep pace with the rapid changes being implemented in corporate strategies.
In spring this year, the Economist Intelligence Unit (EIU) – on behalf of HP Software – surveyed 1,125 IT managers in large and medium-sized business around the world. The findings revealed that only nine percent of IT managers were able to implement all their projects on time. Forty-eight percent of those questioned said that a quarter or more of their projects were delayed. Four percent of IT managers were unable to realize any of their projects on time. “In business, speed is increasingly of the essence,” says Denis McCauley, head of the Global Research Technology department at the EIU. “It is cause for alarm then that so many of those surveyed deliver IT projects late. Companies who succeed in accelerating IT project and service delivery have an advantage, while those who do not suffer at the hand of the competition.”
Most of those who took part in the study agree with this assessment. For example, 62 percent believed that their companies could earn a lot more if IT services were provided more quickly. However, things look very different in reality – only 16 percent of participants said that all of the projects had met the prescribed business goals. 57 percent revealed that the success rate of projects at their companies was 50 percent or lower.

Negative impact on business

In addition to failing to achieve the business objectives, delayed IT projects also have a negative impact on the companies’ operational business and results. IT managers ranked delays in the introduction of new products as the biggest problem, followed by a loss in sales and the failure to realize projected cost savings. There is also the danger that, in the case of takeovers and mergers, it is difficult to integrate different divisions smoothly, thus damaging the company’s brand identity and reputation.
The authors of the study also asked why such a high proportion of IT projects could not be realized on schedule. The answers make it clear that the interaction between IT departments and other business units is far from ideal in many companies. IT managers around the world said that the main reason for delays was that business priorities change while a project is underway. Whereas participants from the Europe/Middle East/Africa (EMEA) region complained mostly about the lack of coordination between the IT department and the operational divisions, managers from the Asia Pacific (APAC) region were mainly concerned about the lack of precisely defined requirements. IT managers from the U.S. were affected by both grievances, but not to the same extent as their colleagues in EMEA and APAC. Further reasons for delays included a lack of resources and too much responsibility. Outsourcing was only mentioned as a further negative factor by participants in the EMEA region.
When it comes to getting delayed projects back on track, European IT managers in particular tend to use rather unorthodox methods. If a delay occurs, they reduce the original goals of the IT project and generally tend to ignore the modified business priorities. Unlike their colleagues in America and the Asia Pacific region, European managers are far less likely to try to automate manual IT processes at short notice. One countermeasure that is popular throughout the world is increasing the project budget at short notice, with 35 percent of managers resorting to this solution in emergencies. In the long term, IT managers believe that increasing the level of automation of IT processes and providing employees with more training are solutions that are likely to accelerate the overall speed of their IT projects.
From a technical point of view, increasing numbers of IT managers are implementing service-oriented architectures (SOA) to harmonize their projects with the business requirements. German technology managers are leading the way in this respect – just over 50 percent of those questioned use SOA. In the EMEA region, quality assurance is ranked first overall, while their colleagues in the Asia Pacific region prefer to improve the efficiency of their IT projects by using project, portfolio, and infrastructure management systems. When asked to name other measures for improving efficiency, international participants listed requirement management, business service management, and IT service management as the most popular solutions.

Improved communication and increased transparency

In addition to these in-house IT improvements, it is also important to work on communication between IT and business, and make the development process more transparent overall, as Uwe Flagmeyer, Presales Manager at HP Software Deutschland, explains: “To achieve this objective, quality control must be geared consistently to the business requirements. In other words, IT experts have to test the application as a business user. If this step is not taken, even though the applications may be error-free on paper, they may not meet the requirements of the business processes.” Moreover, various divisions often place completely different requirements on an IT project that may not be compatible. In this case, it is important to exchange information even before development begins to create a clear plan of action. In large companies, this is only possible with the appropriate tools. In fact, communication could often be improved within the IT departments themselves. “Planners, testers, and developers must all pull together more. Failing to share information often delays projects and threatens the quality of the work,” emphasizes Flagmeyer.
However, the HP manager believes there are a number of positive signs: “Many companies have already seen how better quality can be combined with faster implementation of IT projects and services.” In some banks today, IT developers are already working side-by-side with salespeople. Flagmeyer underlines that this makes it possible to implement changes in software and systems immediately and gives technical experts the opportunity to come up with new ideas and implement them quickly.
A recent study conducted by the British robotic integration software manufacturer Blue Prism shows what can happen when IT projects are continually delayed. 67 percent of the 650 IT managers from large companies in the Anglo-American region who took part in the survey said that rogue software was in use at their companies. When the requisite IT services are not delivered on time, many employees seemingly take matters into their own hands and install unauthorized software without informing the IT department, or even develop their own home-made solutions.

Daniel Grieshaber

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