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Recently HP commissioned a research study on how well senior IT decision makers are doing in providing timely, accurate, transparent IT spending information to key business stakeholders.
When HP got the survey results back from 200 IT executives around the globe, one number jumped out. “The biggest surprise was that 43 percent of the respondents lacked any kind of portfolio management tool for aligning IT investments decisions to business priorities,” Ken Cheney, who heads up product marketing for HP’s new IT financial management offering, ITFM, told CIOZone. “They weren’t even using basic tools such as Excel spreadsheets.”
That IT executives aren’t relying on sophisticated management tools at a time when every dime in corporate budgets counts is seemingly a major concern. Without tools that provide granularity, analytics and automation, CIOS are at an enormous disadvantage when they are called upon to report costs.
Even so, 97 percent of respondents are confident in the consistency and reliability of their being able to collect and communicate IT financial information. That said, three quarters say they estimate actual costs of IT services with a 5 per to 20 percent margin of error.
Let’s see how this plays out. You’re a CIO who has been called to met with your CFO and CIO. They ask what you projected spending will be over the next quarter. You respond that it will total, say, $500,000. “And what’s the margin of error here?” your CFO asks
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If you’re honest and say 5 percent to 20 percent, you should probably start updating your resume. That big a margin of error simply won’t fly in today’s economy. Fortunately, only 27 of the 200 respondents reported a their margin of error between 11 percent and 21 percent in estimating the actual costs of the IT services they deliver. Remarkably, some 10 percent reported a margin of error between 21 percent and 30 percent while 2 IT decision makers said their margin of error was greater then 40 percent.
Conducted by PSM Research, the study indicated that 66 percent of IT executives say transparency is very important to their business stakeholders, but only 44 percent say that stakeholders are “very satisfied” with the level of transparency. And, oh yes, 70 percent say IT demand will outpace budget for a foreseeable future, which means that the accuracy of future projections is going to become even more critical.
If this study is accurate, IT chiefs might think about putting a new item atop their “to do” lists: Find a state of the art tool for taking the guesswork out of gauging IT spending, pronto.
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