IT bosses ignore ROI

Nearly two thirds of UK businesses fail to measure return on investment (ROI) after major IT projects, according to the latest results from the NOP/silicon.com Technology Confidence Barometer.

The survey of senior IT professionals and business decision makers found that only 36 per cent of UK firms conduct an ROI exercise post-project despite increasing pressure on budgets.

This compares with 47 per cent of US and 37 per cent of German firms.

Michael Freedman, director at the NOP Research Group said: "You would have thought given the state of the economy many more companies would be spending their company's money more wisely," Freedman said.

However, Dale Vile, research director at analyst house Quocirca, said: "I'm not surprised by the figure. ROI typically is a pre-project exercise and less often followed up post-project. In fact that's one of its weaknesses."

Vile said ROI should still be used as a key measure in "part of the furniture, infrastructure projects" such as network upgrades but is less likely to feature in what he termed "top level, speculative projects".

He said: "With [infrastructure projects] it's about making sure you're getting the right returns, so ROI is very firmly the right way of approaching it". The second scenario is far less dependent on ROI as a measure of success because IT is being deployed to gain competitive advantage not to cut costs.

"If you speak to CIOs around Europe, that kind of visionary project still exists despite the downturn in the economy," said Vile. "Yes, it's being challenged but it still doesn't need to be quantified."

The Technology Confidence Barometer is based on interviews with 1,300 senior IT professionals and business decision makers in the UK, Germany and the US. Fieldwork was conducted in June and July 2002.