IT Success!: Towards a New Model for Information Technology

6.5. Cost–benefit analysis during the life of a project

Most companies track project costs with respect to budget during monthly or quarterly investment committees or project review boards. The main objectives of these sessions are to see if the budget is under control and the project is on schedule. Very far behind, when treated at all, is risk analysis (discussed in Chapter 4). And finally, hardly a blip on the radar screen, is the ongoing monitoring of expected benefits and the associated cost–benefit analysis.

Under the new business model, such meetings would go beyond just monitoring costs and schedules and include both risk analysis and benefits analysis. Risk analysis would usually be carried out by the IT project manager, and benefits analysis by the business sponsor.

This is, of course, easier said than done. Under the traditional model, the business sponsor will usually balk at anything that changes the schedule. He'll therefore usually push back on risk. Business and organizational risk he'll 'assume' – usually by assuming that it is under control. Technical risk he'll consider an IT problem. Similarly for benefits, which he'll assume will remain as stated in the original business case – even when, as sometimes happens, the IT project manager tries to show that they might have to be revised. By which time, driven by the adversary nature of the traditional client–vendor relationship – and perhaps the business sponsor's own agenda – CYA takes over and each side ensures ...