Knowing IT value is vital

Johannesburg, 10 Jul 2009

IT projects are essential for companies to sustain their business growth and competitive edge, but during economic hardships IT spending is curbed, and sometimes the wrong IT projects are cut, says Gary Lawrence, MD of CA southern Africa.

“At the heart of the problem is deciding which IT projects can be cut and which need more focus in terms of budget or other resources,” Lawrence says.

He explains it can be a daunting task to decide which projects to terminate when. In large organisations, there can be 300 or even more IT projects running simultaneously in various divisions.

“You need to ask questions like, 'how close to completion are these projects?' and 'are they aligned with your business goals and objectives?' You also need to determine what business value you will get from a specific project and importantly, if it will still be relevant to your business when completed, because business objectives can change and usually do during tough economic conditions.”

Lawrence believes few businesses have the tools to measure and monitor whether IT projects are of value to them. These tools are called project and portfolio management, and according to Lawrence, are vital to ensure businesses make the right decisions to enable them to change with the economic environment.

“Project and portfolio management tools are there to facilitate driving IT and business together and provide an overview of all your business initiatives, including IT,” he adds.

Companies usually cut the most costly IT projects running, says Lawrence, just to manage expenditure during hard times, and hope to continue when times are better again.

“This is wrong. CIOs need to evaluate what is needed before they make decisions on expenses and cutting projects. They might even realise they need to spend a bit more, if they have to, on projects that will give the business the returns it requires.

“Project and portfolio management is the key to making the right decisions,” he concludes.