IT Success!: Towards a New Model for Information Technology

6.1. Monitoring costs and benefits for traditional IT activities

If a stock you invested in dropped 20% overnight, you or your stockbroker would definitely be aware of it the very next day, and after an analysis of the situation, might take action to sell or monitor closely. If however the expected benefits of an IT project dropped by 20% compared to original expectations (over a period of a few months, never mind overnight), the business sponsor probably wouldn't even be aware of it the next day – and probably never, because benefit monitoring of IT investments is rarely carried out, or because the numbers are fudged to ensure that the original expectations are 'achieved', or simply because the bad news never reaches him.

The same is not true of the cost side though; any significant cost increases would definitely be noticed, because a budget has ownership and accountability, and delivering to budget is viewed as part of a contractual commitment. It is therefore usually monitored very closely.

Finally, putting costs and benefits together and performing a cost–benefit analysis, both during the project and after it has been delivered, is hardly ever carried out. At best some companies do a post-implementation review after the fact, but more for internal IT best practice than for any financial reasons. As for companies halting or suspending a project as part of a rational ongoing cost–benefit analysis – well, that hardly every happens: projects are usually only stopped after they ...