2009-11-25
Global Survey Reveals Late IT Projects Linked to Lower Profits, Poor Business Outcomes
KUALA LUMPUR, July 12 2007 – A survey of 1,125 information technology professionals based in Asia-Pacific, Europe, Middle East and the Americas, reveals a clear link between slower delivery of IT projects and services and lower business profitability.
The recently released study conducted by The Economist Intelligence Unit (EIU) on behalf of HP identified unacceptable levels of IT delays. In Asia Pacific1 nearly half of companies surveyed said 25 percent or more of IT projects are delivered late; and in 72 percent surveyed, no more than one in two IT initiatives produces positive business outcomes.
Malaysia respondents identified the primary consequences of such delays in this order: reputation or brand damage to the organization, delayed product launches, loss of anticipated revenues, delays to planned cost savings, failure to integrate businesses or departments in M&A situations, and loss of IT jobs – all of which impact company profitability. Meanwhile, 83 percent of companies surveyed in Malaysiaagree that their companies would experience a substantial increase in profitability from the faster delivery of IT services and projects.
“In business, speed is increasingly of the essence. It is cause for alarm then that so many of those surveyed deliver IT projects late,” said Denis McCauley, director, Global Technology Research, The Economist Intelligence Unit. “Companies that succeed in accelerating IT project and service delivery have a significant advantage, while those that do not may suffer at the hand of the competition.”
In those surveyed firms where 75 percent or more of IT initiatives in the past three years have had a positive business outcome, improvement in the speed of service delivery has been considerably higher than the average. In high-performance firms – those reporting a rise in profit of 25 percent or more over the same period – speed of service delivery has also improved more than in others.
By leveraging HP Software’s Project & Portfolio Management Center solution, United Overseas Bank (UOB) Malaysia has been able to raise the level of IT productivity and also gain a better focus on aligning IT to drive desired business outcomes.
“At UOB, we are now able to enforce standard software development methodologies as well as enhance control across all IT projects. This has resulted in an improved speed and quality of service delivery, which translates to a faster realization of project benefits,” said Lum Chee Onn, Senior Vice President, Information Technology Division, UOB Malaysia.
The survey showed that accelerating speed of delivery does not have to aversely affect quality or positive business results. When project overruns do occur the culprits are usually midstream changes to business priorities and poor coordination between IT and business managers. Better definition of business requirements, greater investment in IT process automation and more collaboration across IT functions are the primary solutions for accelerating time to delivery.
“The new reality is that technology doesn’t just support the business – technology powers the business. IT risks are now business risks,” said Tay Bee Kheng, General Manager, HP Software, SEA & Asian Emerging Countries. “Today, CIOs are measured on overall business outcomes such as how fast they can help the company launch new products and bring new distribution channels online. It’s no longer just about delivering only on technology service-level agreements.”
Survey highlights and background
The EIU whitepaper, ”Technology At The Speed of Business” is available for download at www.hp.com/go/software.
This research was prepared in co-operation with the Economist Intelligence Unit. The author of the report was Terry Ernest-Jones, and the editor was Denis McCauley. The report, “Technology at the Speed of Business”, is based on the findings of a survey of 1,125 IT professionals based in Asia-Pacific, Europe, Middle East and the Americas.
1IT Professionals based in the following Asia Pacific countries were included in the survey: Australia, China, Hong Kong, India, Japan, Korea, Malaysia and Singapore.
Questions andMalaysiafindings highlighted in this release include:
· “Approximately what percentage of IT projects undertaken in your company over the past three years has been delivered later than originally planned?”
10% = 33%, 25% = 57%, 50% = 10%
· “My company would experience a substantial increase in profitability from the faster delivery of IT services and projects”
Agree 83%, Disagree 13%, Don’t know/Not applicable 3%
· “What have been the most common consequences of late delivery of IT projects in your organization?”
Reputation or brand damage to the organization: 50%; Delayed launches of new products/services: 43%; Loss of anticipated revenue: 37%; Not making planned cost savings: 23%; Failure to integrate businesses or departments in M&A situations: 20%; Loss of IT jobs: 13%; Customer dissatisfaction 3%
· “Approximately what percentage of IT initiatives undertaken by your company in the past three years has had the intended positive business outcomes (impact on your company’s business?)”
10% = 17%, 25% = 63%, 50% = 13%, 75% = 7%
About HP
HP focuses on simplifying technology experiences for all of its customers – from individual consumers to the largest businesses. With a portfolio that spans printing, personal computing, software, services and IT infrastructure, HP is among the world’s largest IT companies, with revenue totaling $97.1 billion for the four fiscal quarters ended April 30, 2007. More information about HP (NYSE: HPQ) is available at www.hp.com.
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