IT spending needs value checks

Almost all money spent on projects could be better spent

Over ninety percent of firms' IT budgets could be better spent and generate more value if IT managers monitored investment more closely to ensure they meet business goals, according to a report published by Butler Group. The analyst firm said this step would also reduce the likelihood of IT departments being outsourced.

Mark Blowers, co-author of the Measuring IT Costs and Value report, said monitoring and measuring the value generated by IT investments is essential to understand how technology can benefit business.

"Monitoring costs is very important but it's also vital that [IT managers] don't neglect value, because that is now becoming more important to the board," said Blowers. "[IT managers] should first get a feel for where they are at the moment by benchmarking to see how they compare with other organisations in their particular sector."

Blowers added that businesses need better systems to manage their technology portfolios, as this would help them understand the IT systems they have in place, and align them with the financial objectives of their organisations.

"IT staff shouldn't be seen as technical people - they should be able to help solve business problems and provide business solutions," Blowers said. "But they must be proactive or the board will look at other ways of providing this... possibly by outsourcing."

Blowers also recommended that IT managers should carry out surveys to find out how staff and users perceive the IT department and what they expect of it.

IT chiefs in government departments and local authorities could find it particularly challenging to align technology investments with business operations. A separate survey released today by business technology optimisation specialist Mercury indicates that while 70 percent of private sector professionals think IT is well integrated into their core business operations, just 34 percent of public sector professionals feel the same way.