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Smart Enterprise: Greater Expectations

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hen a 35 percent success rate is considered good, some- thing's not right. Unfortunately, that's the case with many IT projects. According to figures gathered every other year by market research firm Standish Group International, 35 per- cent is the highest success rate IT projects have achieved in the last decade. In other words, of all IT projects, roughly only one in three is delivered on time, within budget and with all its promised features, and even then it doesn't mean the proj- ects are delivering business value. And the remaining 65 percent? They are either "challenged," in Standish Group parlance (meaning they missed any or all of those three criteria), or are outright failures — they were canceled, never completed, or delivered but not implemented. Why this happens, and what CIOs should do about it has attracted the attention of several leading researchers. Among them is Joe Peppard, a Professor at Cranfield School of Management in Bedfordshire, U.K., and Director of the school's IT Leadership Program. Peppard has also authored or co-authored several books on the subject, including one scheduled for publication next year entitled, Business Innovation with IT. To develop his theories, Peppard has studied hundreds of large-scale IT projects over the past 15 years. In his review, Peppard finds that IT investments at many organizations are simply not aligned with business goals. And why is that? Peppard's answer may surprise you: He believes that business leaders have incorrectly shifted responsibility for the business value of IT projects away from themselves and onto the CIO. That's unfair to CIOs, he says, and it shortchanges the organizations, too. "A lot of C-level execu- tives don't understand the role of IT, and we find the CIO having to second-guess the business strategy," Peppard says. "Even determining the IT investment portfolio is a business decision, but in most organiza- tions it is abdicated to the CIO." Another researcher exploring the ques- tion of why more IT projects don't succeed is John Thorp. He is head of the Thorp Network, a Victoria, B.C.-based consulting firm, and co-author of The Information Paradox: Realizing the Business Benefits of Information Technology (McGraw-Hill, 2003.) Thorp's take on the issue, similar to Peppard's, is that business leaders must keep their hands firmly on IT. "How many times have I heard a CEO say, 'I want to focus on the core business and have someone else deal with IT'?" Thorp asks. But how you manage IT, and how you manage the changes that IT shapes and enables, is too important to leave entirely to the IT function." Delegation is fine, he says, but business all too often relinquishes anything with the IT label to the IT function. "Even if the IT function were able to manage change," he says, "it wouldn't have the span of control and authority to do so." It is up to the CIO, Peppard says, to gar- ner the needed support, involvement and engagement from business-side colleagues before proceeding with any project — or abandon that project if the backing is not there. "Failing this, the CIO should probably look for a new job, as he or she unlikely to PHOTOGRAPH: THINKSTOCK Smart Research To deliver business benefits from IT projects, leading researchers say, smart CIOs will keep their business partners engaged and involved. | By Lamont Wood Uncovering Hidden Value W 48 SMARTENTERPRISEMAG.COM

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