IT Success!: Towards a New Model for Information Technology

2.3. The fundamental difference between IT and non-IT activities

Comparing the process breakdown for traditional IT activities (Fig 2.1) and general business activities (Fig 2.2), we can see that when the costs are not coming out of the client's pocket or budget (or when chargeback mechanisms are not effective in regulating demand):

• The initial cost–benefit analysis phase is generally present in a subjective form, which tends to magnify the benefits and reduce the costs, with the main objective being to get a green light to proceed.

• The ongoing cost–benefit analysis phase is generally absent – or is present in a subjective form that tends to magnify the benefits and reduce the costs, with the main objective being to justify an investment that is not yielding the expected returns.

We can draw a fundamental conclusion here, namely that the concept of a cost–benefit analysis is really only valid if both the costs and the benefits apply to the client from an accounting perspective. If not, then the product or service is essentially 'free', and there is no real requirement for a cost–benefit analysis 'with teeth', i.e. one which can be used to not just approve a project, but also to withhold or cancel its funding if it is not living up to expectations.

It's like your teenager who asks you to buy him or her the latest fashion wear or consumer device, which they absolutely 'gotta have'. As long as you're doing the paying, they can always be counted on to apply the required ingenuity to ...