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Ill-conceived IT projects ’cost $800bn a year’

’Gambling culture’ must be changed, says Fujitsu leadership expert

Business needs to take greater responsibility for technology investments, as $800 billion is wasted on ill-conceived IT projects each year, according to the head of Fujitsu's global consulting centre for strategic leadership, John Thorp.

Pointing the finger at companies for having "a serious addiction to gambling on IT investments", Thorp said a huge amount of money is spent on IT that is creating no value.

"The minute you put IT in front of something, it's an IT problem. IT strategy, IT governance, it's not about information technology, it's about enterprise value," he said.

"Business change programs are the responsibility of the business. That means business has to do 85 percent of the work to realise the value of the 15 percent that is IT enabling."

However, Thorp believes companies are in a state of denial.

"It is denial of complexity. We want someone to come and tell us there's a simple solution to my complex problem; unfortunately the vendors do this all the time. Vendors oversell and customers overbuy," he said.

The goal, he said, is to get optimal value at an affordable cost and at an acceptable level of risk.

"This is what governance is all about, but it has to be led from the boardroom," he said.

Governance, Thorp said, is like steering a ship and this involves plotting a course and staying on course.

"Now when we go off course in the business world we say it will be OK, we'll get back on track. Hope is not a method. How do you get 880 degrees off course? One degree at a time," he said.

"When we hear about $500 million IT investments that have gone nowhere, don't you think there was some indication earlier that there was a problem? Why didn't we do anything about it? It is important to manage the journey."

Thorp said "filtered information" is one reason why projects can go off course.

"When you know this major project is the boss's pet project, you know he doesn't want to hear it's not working. And guess what, you don't tell him. And if you do tell him, he doesn't want to hear it. He says 'I'm sure you're on top it'," Thorp said.

Implementing CRM or any other technology isn't about technology, he said, it's a change program.

"Managing change is the most talked about, written about, least done thing in organisations today; we have talked about this stuff ad nauseam," Thorp said.

"This is about balancing value and risk. We have talked about total cost of ownership for a long time. I think we need to talk about total value of ownership.

"Why is it we've always got time at the end when something's in a ditch to do an audit but we never have time to get it right in the first place? We're always in a rush to fail, we never take the time to succeed."

Projects, he said, should address technology change, business change, process change, people change and organisational change.

"We have got nowhere near to tapping the potential that IT can enable if we were to think differently about how we manage and apply it. I'm not naive enough to think that it isn't damn hard, but I'm idealistic enough to think it's worth doing," he said.


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