A recent HP survey said that speed of project delivery was driving company profits, yet a quarter of projects ran late. In 63% of projects, respondents said they would reduce the scope of the project if a project was behind schedule. And 31% said they would reduce quality and performance testing to prevent a delay and 45% said they would increase their budget.Significantly, 40% of UK users admitted that outsourcing was one of the reasons for project delays.

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The steps to measure a business:

1. Create a strategy
2. Identify business processes
3. Break down strategy and processes into KPIs
4. Create measurable objectives
5. Assign objectives to manager
6. Communicate startegy
7. Cascade objectives to key individuals
8. Measure, report and monitor
9. Update measures as appropriate

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Mvalent conducted a market survey of Fortune 1000 IT teams in March 2007 with the purpose of gaining deeper insight intothe priorities and challenges they face in managing application infrastructure that supports the delivery of mission-criticalbusiness applications and services to their internal and external customers.

• Each hour of application downtime costs Fortune 1000 companies in excess of $300,000, according to nearly one-third of respondents at companies that track the business cost and impact.
• each single roubleshooting incident costs more than $1250 in direct labour costs alone. But the economic impact of the resulting downtime dwarfs these direct costs

Click on table below for larger view:

Valent survey (pdf)

Interesting reading relating to project delivery stats.
“the augmented HP portfolio aims to help IT organizations make sure IT and non-IT managers work on the same business goals; speed up internal processes within IT functions, such as IT strategy, applications and IT operations; and automate processes across the different IT roles.”

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BI-BestPractices.com is a collaborative and interactive forum for the business intelligence and data warehousing community to support and foster growth within the industry. I particularly like the piece on ROI for implementing a BI system (here).

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Offshore IT outsourcing suppliers have been ranked worse than larger inshore ones when it comes to delivering projects on time.

A Forrester IT services survey of European IT decision-makers found that 46% of respondents believed offshore outsourcers were worse at project delivery, compared with only 23% who said they felt inshore providers were better.

The survey also revealed that users found offshore providers lacking industry-specific and domain expertise when handling their requirements and that the value for money they offered was negligible.

“Renegotiating with outsourcing suppliers and strengthening supplier management capabilities was ranked top of our respondents’ agendas,” said Sonoko Takahashi, associate analyst at Forrester Research.

Takahashi said that the sole focus on price had lead to some companies pursuing offshore strategies without even considering inshore possibilities.

Forrester said it knew of an example in the automotive industry where the service provider for application management was selected on price “only,” under procurement pressure.

“IT outsourcing is primarily about relationships between people.To increase client satisfaction, offshore suppliers need to put more effort in to maintaining a relationship and a key part of this is building more flexibility into contracts from the start,” said Takahashi.

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The need to innovate will drive the next big wave of spending on IT, but CIOs must change the way technology is promoted at board level if it is to deliver value, research released today by analyst firm Forrester concludes.

A survey of 3,000 IT decision makers by the firm revealed that 30% intend to spend their IT budgets over the next eight years on developing new applications and programmes, rather than on maintaining older system.

“Developing internet-based applications to improve interactions with customers and suppliers is now key on CIO’s agendas,” said David Metcalfe, senior vice-president at Forrester.

“CIOs are under increasing pressure to innovate through new IT applications, and the opportunity cost of losing ground to competitors is fuelling this trend.”

However, Metcalfe said only a small number of companies recognise the importance of innovating through the use of IT. These companies were ones where IT was already central to doing business, such as information providers and telecom operators.

According to Metcalfe, bricks and mortar companies with traditional boards still regard IT with indifference or as a cost centre, and so CIOs need to change the way they represent IT innovation.

“It is not a given that technology will deliver business results. For example, IT and its business constituents still have mismatched expectations for how long changes to IT systems should take, and the perspective of firms’ top executives reflects that disconnection.”

To bridge this, Metcalfe advised CIOs to focus on measuring whether IT applications are delivering to business performance metrics, such as profit, revenue, opportunity cost, or contribution to innovation, rather than on technology efficiency metrics.

“Business will become so deeply embodied in technology, and the technology so deeply embedded in the business, that the development of next generation IT applications needs to be managed with more savvy than it is today,” he said.

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Corporations appear to be spending more time and money on regulatory compliance now than at any other time in recent history. In fact, the largest U.S. corporations spent an average of US$4.6 million implementing Sarbanes-Oxley Act (SOX) section 404 controls in their first year of implementation, and Forrester Research estimates the five-year cost of Basel II implementation for the largest banks to be $150 million.

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