Business Engine Survey Reveals Global 2000 Firms Waste $300M Each Year From Failure to Run the Business of IT.

SAN FRANCISCO -- A survey of Global 2000 companies has shown that over $300m per year is being wasted on poorly managed IT projects due to a failure to efficiently run the business of IT. The figure comes from an international Value Assessment survey of IT directors and executives conducted by project portfolio management and collaboration software specialist Business Engine. The in-depth survey was conducted over a three-year period with over 30 blue chip organizations(1) across the financial, healthcare, retail and telecommunications sectors(2).

The primary objective of the survey was to identify which business areas within organizations deliver the most value, thereby guiding executives to focus and prioritise IT budget on those areas that produce the greatest and most immediate ROI. Under-utilization of offshore outsourcing (offshoring) was found to be the single biggest cost saving opportunity missed by businesses.

"The survey reveals major missed opportunities for increasing the value of IT within an organization," said Doug Dickey, CEO and president of Business Engine. "Three key areas account for the bulk of the opportunities: poor visibility and control of IT projects, a failure to align a company's IT with its business strategy, and the under-utilisation of existing resources -- primarily offshoring -- are the culprits."

Data from the Value Assessment survey identified that:

--The single biggest cost to a business was the under-utilization of offshoring. The Survey concluded that 29 percent of the total $300m was lost due to companies failing to take better advantage of existing resources across geographical boundaries.

--28 percent of the total potential cost savings were lost due to poor visibility and control of projects resulting in overruns and delays and a failure to identify and resolve problems in the early stages of a problematic project.

--A failure to align IT with business strategy also accounted for 28 percent of the losses.

"It is clear that aligning IT with business strategy is the quickest way to achieve considerable value gains and cost savings," continued Dickey. "Constant evaluation, coupled with portfolio prioritization and optimization means a company can reallocate resources from low to high value projects quickly and efficiently. The biggest prize, however, will go to those organizations that start their offshore initiatives as soon as possible."

Business Engine's analysis of the data also includes key recommendations for companies seeking to harness the available cost savings. The full report is available for download at http://www.businessengine.com/solutions/value_of_it.html.

The process involved using Business Engine's Value Assessment Tool to survey individuals within each organization regarding the current state of their project portfolio management and financial IT management practices. Typical questions included: "Can you easily and accurately compare project budgets to project benefits?" and "Can you easily identify projects that are delayed because they're waiting on resources?"

The Value Assessment Tool provides organizations with a customized roadmap on where and how to spend valuable and scarce IT budget dollars most effectively. Unlike ROI calculators, Business Engine's Value Assessment Tool not only uncovers hidden business improvement opportunities and calculates the value of potential cost savings; it also suggests easy-to-execute strategies to harness those savings in reality.

About Business Engine

Since 1985, Business Engine has been delivering collaborative project portfolio, resource and financial management solutions to project-driven companies throughout North America and Europe. Over 400 Global customers including Boeing, Deutsche Bank, General Electric, Lloyds TSB, Merrill Lynch, Pfizer, Siemens and Tesco rely on Business Engine to accelerate time-to-value, control costs, and be more dynamic in the face of changing market conditions. Business Engine is headquartered in San Francisco, California, and has offices throughout the United States, United Kingdom, Belgium, and India. Visit www.businessengine.com for more information.

-- (1) Of the 30 organizations interviewed, seven were European, seven based globally and the remaining 18 were headquartered in North America.

-- (2) Financial services (48%), healthcare (9%), retail (19%), telecom (6%), transport (6%), drinks (3%), other including life sciences, auto, etc (9%)