August 22, 2002, 11:08 AM — Although most IT leaders are talking tough when it comes to cost-justifying their IT investments, a new study suggests that it might be just lip service.
According to a report published by Ernst & Young LLP, 79 percent of Fortune 1000 IT decision-makers agree that financial justification of IT projects is important to them, yet only 40 percent conduct business case analyses on a regular basis.
Practices of Australian IT executives appear to follow this trend. If business case analyses are conducted at all they are done on a "haphazard" basis, according to IT executives who spoke to Computerworld.
Red tape, bureaucracy, time pressures and a lack of tools and resources were cited as the reasons behind the lack of follow-through.
Grace Removals Group IT manager, Howard Malyon said his company did not conduct business case analyses on a "regular basis", despite financial justification being important to a project's approval to proceed.
He said time was a "big consideration" for this state of affairs as there is no time scheduled at the end of a project to perform a ROI analysis. "If the company had an internal audit division I believe this would be a role for them."
Ally Thorne, IT manager at The Wine Society, said analyses are conducted, but "it does depend on the cost of the project."
"It may cost you more in resources to justify the cost, than the project itself."
A "significant excess of demand" for IT resources and the value of IT to the business has been a "major factor" in mandating ROI within Eastman Kodak, David Lindill, ERP program office manager greater Asia region, said.
He said ROI is required for all IT investment projects and significant enhancements -
