IT projects over spend costs firms €375m

OVER-BUDGET Information Technology (IT) projects are costing large Irish and British businesses more than €375 million a year.

Research from CA, conducted by independent company Loudhouse, of 100 chief information officers (CIOs) and IT directors, reveals that poor visibility of IT project status and a lack of management control over projects are costing Irish and British enterprises €375m a year.

A third of all projects implemented each year end up over budget, with the typical over-spend between 10% and 20% of the original budget, the study found.

In addition, a quarter of all IT projects were shown to end up more than 50% over budget, according to CA Ireland country manager Frank Kennedy.

“In Ireland, we have seen a number of high-profile IT projects running way over budget or not meeting their business objectives. Maybe this isn’t surprising when the survey shows that half of all enterprise companies are still using spreadsheets to manage IT projects,” he said.

The main reasons for budget over-spend are poor forecasting, project scope increasing during implementation, and issues of interdependencies and conflicts between multiple projects, according to the CA executive.

“This isn’t helped by the lack of visibility and control that CIOs have over their project portfolios — 39% of CIOs and IT directors don’t have complete visibility over the initiatives they are running, so cannot see when projects are threatening to run over budget,” said Mr Kennedy.

“With enterprise companies running an average of 29 projects simultaneously and many of the projects increasing in complexity, a lot of pressure is being placed on CIOs and IT directors as they are expected to plan, manage and complete all of these projects on time and on budget.”

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