One fifth of British IT projects run more than 50% over budget. That's according to a survey commissioned by CA of one hundred CIOs at large companies in the UK and Ireland, who said that half of IT projects ran 11% to 50% over budget, and a further 21% of all projects were at least 51% over budget.
In all, only 15% of respondents said they expected live projects to reach their budget targets. Based on an average project budget of £380,000 with a 15% overspend, CA estimates that the additional cost to enterprises in the UK and Ireland alone could be £256m annually.
The research was commissioned by CA from Loudhouse, which conducted the survey in July this year, targeting companies with more than 500 employees.
The companies had an IT budget which was typically between £1m and £5m, and were on average running 29 IT projects at any one time.
Some CIOs, in major financial institutions, were ultimately responsible for up to one thousand projects. CA said the reasons cited for overspends included poor forecasting (blamed in 50% of cases), project scope increasing during the implementation phase (39%), and conflicts between multiple projects (36%).
Only half of the companies surveyed claimed to use delivery on budget as a key measure when evaluating project success. A third of companies in the survey measured IT success in terms of business objectives, and just one quarter calculated return on investment based on business value delivered.
According to David Groves of CA, IT departments that managed to stick to their budgets did not necessarily score highly on providing value to the enterprise.
Groves said: "What this survey tells us is that CIOs are still principally being judged on whether they deliver within budget, rather than delivering strategic value to the business. IT need not be the victim here - it must be able to control its own destiny in a way that creates focus on initiatives that deliver the most value to the business, not just on those that keep the lights on.
"Until IT can make this transition, CIOs will only ever be judged on cost".
With 85% of projects in the survey over budget, the average CIO must be getting a hard time from their board, he suggested.
In the survey, 39%of IT directors complained of less than complete visibility over individual projects. Half of the enterprises were found to rely on spreadsheets as their main management tool for IT projects.
While the public sector might be castigated on a regular basis for a perceived inability to keep IT costs under control, Groves said that enterprises appeared to have little reason to assert that they were doing any better.