AN overwhelming majority of IT projects undertaken by Singaporean companies in the recent past did not achieve a positive outcome and were delivered late, according to the findings of a survey done by the Economic Intelligence Unit (EIU).
Ms Tay: 'When project overruns do occur, the culprits are usually midstream changes to business priorities and poor coordination...'
Speaking to BizIT, Tay Bee Kheng, general manager for Hewlett-Packard's software division, said the survey showed 74 per cent of the Singaporean respondents felt half or less of the IT projects had positive business outcomes, resulting in a significant waste of investment. Only 26 per cent felt that more than half of IT projects have positive business outcomes.
The EIU survey was done in collaboration with HP for the third year running. According to Ms Tay, there were a total of 1,125 global participants in the survey, out of which 40 were from Singapore and 30 from Malaysia. Chief information officers (CIOs) or equivalent heads of IT of companies with a turnover of more than US$250 million were interviewed for this survey.
The countries surveyed in Asia-Pacific included Australia, China, Hong Kong, India, Japan, Korea, Malaysia and Singapore.
Ms Tay, who is HP Software's GM for Asia and emerging markets, said poor requirements definition and business-IT alignment were the main causes for the delay in the delivery of projects.
In the Asia-Pacific including Japan (APJ) region, 61 per cent of those surveyed felt half or less of IT projects had positive business outcomes while as many as 93 per cent of Malaysian companies felt the same way.
In the Asia-Pacific region nearly half of the companies surveyed said 25 per cent or more of IT projects are delivered late; and among 72 per cent of those surveyed, no more than one in two IT initiatives produce positive business outcomes.
The Singapore respondents identified the primary consequences of the delay in IT projects in this order of importance: loss of anticipated revenues, delayed product launches, delays to planned cost savings, failure to integrate businesses or departments in merger and acquisition (M&A) situations, and reputation or brand damage to the organisation.
Ms Tay pointed out that all of these can potentially impact a company's profitability.
The survey also revealed that 83 per cent of the Singaporean companies agreed that their companies would experience a substantial increase in profitability if IT services and projects were delivered faster, she noted.
Answering a question about IT projects that were delivered late in the past three years, 59 per cent of the Singaporean respondents said less than a quarter of the IT projects were late, while the rest felt a quarter or more of the projects were late.
Interestingly, in Malaysia, only 33 per cent felt that less than a quarter of IT projects were late, while 67 per cent felt a quarter or more of IT projects were late.
Commenting on the survey results, Denis McCauley, EIU's director for global technology research, said: 'In business, speed is increasingly of the essence. It is cause for alarm then that so many of those surveyed deliver IT projects late.'
Mr McCauley added that companies that succeed in accelerating IT projects and service delivery have a significant advantage, while those that do not may suffer at the hands of the competition.
HP's Ms Tay added that the survey showed that firms where 75 per cent or more of IT initiatives in the past three years have had a positive business outcome, improvement in the speed of service delivery has been considerably higher than average.
In high-performance firms - those reporting a rise in profit of 25 per cent or more over the same period - speed of service delivery has also improved more than in others.
'The survey showed that accelerating speed of delivery does not have to adversely affect quality or positive business results. When project overruns do occur, the culprits are usually midstream changes to business priorities and poor coordination between IT and business managers,' Ms Tay noted.
The HP official added that better definition of business requirements, greater investment in IT process automation and more collaboration across IT functions are the primary solutions for accelerating time to delivery.
