The IT projects no-one wants to pay for

In this month’s discussion of the integration of risk, customer and finance data in the banking and insurance sector, Accenture executive Edwin van der Ouderaa lays out a taxonomy of projects that will ring true for IT leaders in all sectors.

There are, he explains, the projects that pay for themselves because they address a specific and defined business challenge. These are the easiest to secure investment for, as they have the explicit backing of the business.

Then there are rationalisation and optimisation projects, van der Ouderaa explains, which may not address a specific business need but nevertheless fund themselves via operational cost reductions.

But then there is the third kind. These are IT infrastructure and integration projects that serve the long-term, strategic interests of the organisation, but whose business benefit is difficult to calculate, and which may not deliver any benefit for years to come. “These projects are like building a new motorway,” says van der Ouderaa. “Everybody will benefit, but nobody wants to pay for it.”

These projects are especially hard to fund when IT cost is viewed with extreme scrutiny, as it is today. Van der Ouderaa suggests that the chance of these projects receiving funding is a function of the CIO’s leadership abilities. It is almost a matter of convincing the business to invest “on good faith”, he suggests.

However, these large-scale integration projects often involve organisational integration too, and some question whether the typical CIO has the authority to make that happen. “I don’t know if the CIO can drive that through,” says James Hunt, senior financial services consultant at data warehousing provider Teradata. “If it involves business change, it must come out of the business.” In the case of integrating risk data with marketing and finance systems, Hunt says, “it will take a business leader who is sufficiently technologically savvy to recognise the value”.

That raises a question – do business leaders who understand the strategic value of information integration exist? And if not, do CIOs have the vocabulary with which to articulate that value? Meanwhile, a recent study by Gartner has found that chief financial officers are increasingly involved in IT investment decisions. As a result, the CIO’s responsibility is to ensure that the CFO “is educated on technology”.

It appears, then, that articulating the economic benefits of long-term information integration projects is a key skill for today’s CIO, lest they be ignored altogether.

Have you successfully developed terms of reference with which to discuss these benefits with the business? Or are you struggling to find them right now? If so, I’d be interested in hearing your experiences, as this is something that Information Ageplans to research on behalf of our readers.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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