IT failures driven by poor communication

21 Oct 2004

One quarter of European firms report losses of between €50,000 and €10m as a direct result of IT failures, research has indicated. The study highlights serious misalignment between the objectives of the board and the requirements of the IT function, with 52pc of all IT decision makers believing their business and IT strategies are not in harmony.

The research, conducted by enterprise management technology firm BMC Software, indicates that a communication gap appears to be at the heart of the problem. Some 62pc of those interviewed believing that changes in business objectives were not communicated quickly enough for the IT function to respond effectively and 16pc of IT decision makers claiming that changes are either not communicated to them at all or only communicated informally by word of mouth.

The impact of this communication gap was significant for many organisations with 25pc of companies questioned reporting losses of between €50,000 and €10m directly as a result of IT failures in the past two years.

Whilst poor communication channels were a key barrier to effective alignment, under-resourcing in the IT department and over-promising on abilities also contributed to the issue. The results constitute a call to action for companies to communicate their business strategy to their IT departments more effectively in order to help build IT infrastructures to support business objectives.

Alan Smith, managing director and vice-president for Ireland and the UK, BMC Software commented: “We cannot leave IT decision makers operating in the dark and then wonder why technology cannot meet our business needs.

“Businesses must bridge the communication gap with structured operations meetings to ensure all departments are briefed on the latest business objectives. This will allow IT decision makers to improve the speed and quality of their IT services, to improve strategic planning activities and concurrently provide operating cost reductions. These are essential ingredients to help companies achieve long-term success.”

Improved communication was at the top of the list of needs for IT decision makers to ensure closer alignment of business and IT objectives. Over a third of IT decision makers (33pc) felt they should spend between half an hour and one hour a week more with their CEO in order to understand what was required from their IT function.

The research also indicates that only 15pc of senior IT decision makers felt that their department provided the company with any unique competitive advantage, whilst 12pc had seen critical business processes such as billing and accounting completely fail as a result of technology in the past 24 months.

By John Kennedy