Firms squander IT funds

Just under two-fifths of business leaders have admitted to wasting money on IT investments because they failed to understand the needs of their organisation, according to a new survey.

The findings suggest that IT directors should spend more time ensuring the briefs provided by business managers are in line with corporate objectives, and the justification for IT purchases and deployments are rigorously documented.

The poll of more than 3,000 UK business decision makers by YouGov found that 40 percent of chief executives believe that some of their investments in IT over the past five years have been a waste of money. Furthermore, 39 percent admitted they had failed to understand their business needs when investing in technology.

The survey, sponsored by business management software specialist Sage, also revealed that purchasing decisions among companies with more than 100 employees were chiefly influenced by the internal IT department or technology suppliers - each cited as a factor by 62 percent.

Thirty-nine percent of respondents said that they took a lead from their competitors, and about a quarter said they were influenced by accountants.

Only 22 percent took into account the views of consultants or resellers, and perhaps surprisingly 13 percent cited family and friends as being a major influence on purchasing decisions.

Some firms expressed concern about the basis for their IT investments. More than a quarter of business leaders said they had been sold a product that did not meet their needs or had received poor customer service from suppliers.

Paul Stobart, managing director of Sage, said, "The survey highlights the need for the industry to deliver tangible benefits, focus on selling practical solutions not technology for technology's sake, and improve after-sales customer service."

Stobart added that the findings suggest vendors should do more to help customers integrate new technologies with existing systems and not automatically adopt the "rip out and replace" attitude.

The survey also revealed that confidence had fallen in the efficiency-saving power of IT investments.