ENTERPRISE 2004 ROUND UP: Finance Management for CIOs
What should a CIO need to do to deal with finances when it comes to IT deployment in the company?
Tuesday, February 24, 2004
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What should a CIO need to do to deal with finances when it comes to IT
deployment in the company?
Emphasizing on it, Rajeev Batra of Ernst and Young stressed on some of the
challenges being faced by CIOs at present.
In his address to the CIOs on ‘Financial management for CIO’ at the CIOL
‘C Change’ event, Batra said that, in all, only 27% of IT projects actually
see the light of success. While 33% of these projects becomes challenging, 23%
gets cancelled before completion and 50% are failure in terms of meeting
budgets, functionality and schedule.
These projects fail because such projects have no real connection to the
profit and loss drivers of the business, so no business unit has vested interest
in their success.
Rajeev
Batra, Director,
Ernst and Young
IT
projects fail because they have no real connection to the
profit and loss drivers of the business
He also said that three out of four IT initiatives taken by CIOs fail because
such projects have no real connection with the profit and loss drivers of the
business, so no business unit has vested interest in their success.
To cope-up with such situations, Batra suggested measuring the value of
technology investment before the start of the project and added that it is only
possible by improved communication, increment in organizational flexibility and
streamlining knowledge.
He concluded with the quote, "When CIO stop thinking like cost centers
and start thinking like business partners, IT will begin to earn its keep."
Some of the essential elements he talked about of an IT investment is that
every project undertaken should have good RoI. It should be built on hard
savings, have a short time-frame with accountability and low risk of disruptive
failure, he added.
