New strategy needed to prevent spate of IT failures

28 Oct 2004

ANTWERP — A major clash of cultures in terms of the mismatch between the objectives of business and technology professionals has led to 80pc of IT projects failing, such as Sainsbury’s recent £3bn sterling IT flop and Hewlett-Packard’s (HP) SAP investment write-off, says software vendor giant BMC Software.

To counter this “growing disconnect between the objectives of business managers and the objectives of IT managers”, BMC has unveiled a new strategy and methodology for closer alignment of business and IT in running a successful business known as business services management (BSM). The US$1.4bn firm also ruled that the 40-year-old server system known as the mainframe is going to have greater importance to IT in the future, despite the influx of server technologies such as Unix and Wintel, and more recently, Linux.

“80pc of IT projects fail,” says Jonathan Priestley, director of enterprise data management at BMC. Priestley cited the growing importance of IT to business and how high-profile technology failures had become major business news in recent weeks. He cited HP’s CEO Carly Fiorina’s recent admission during an earnings announcement that a major SAP implementation project at the computer giant had failed resulting in a significant cost to the company. The admission wiped 40pc off HP’s share price. Another high-profile IT failure to hit headlines in recent weeks was the major £3bn sterling IT flop at Sainsbury’s in the UK.

In recent weeks, BMC reported that one quarter of European firms report losses of between €50k and €10m as a direct result of IT failures due to 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.

At a conference aimed at European IT and business professionals in Belgium today, BMC introduced a new strategy for pursuing IT projects known as BSM. This is the company’s approach for enabling companies to manage IT and services from a business perspective. BSM enables companies to understand and predict the impact of technology changes on the business, and conversely, how changes in the business impact IT, resulting in improved customer service and business performance.

“The impact of failing IT projects is impacting on business results,” explained Paul Arthur, head of corporate strategy for BMC’s EMEA operations. “There is one constant, IT is only there to support business. Without business, there is no requirement for IT.

“There was a time only recently when technology acquisition was running ahead of business acquisition,” Arthur said, alluding to the technology boom that ended abruptly in 2000. “There has to be a business perspective for everything that IT professionals do. There is no point introducing new technology unless there is a perspective on how that new product delivers tangible value.

“IT budgets are starting to stabilise and once again businesses have a chance to invest in new projects, new markets and new developments. But if you are going to invest in a new technology there has to be a business requirement for it and a clear path for return on investment. As a result, IT professionals are being challenged more and more to improve business agility.

“BSM is not just about IT delivering services for businesses and their customers but guaranteeing services for tomorrow and drive value. There is no IT without business. Value is key,” Arthur said.

By John Kennedy