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IT Budgets Increase While Methods to Protect Return on
Investment Still Lag According to Gladwyne Software Surety Survey
Contingency Budgeting Most Common
Method Used to Protect Against IT Project Failure
King of Prussia, PA, January 30,
2001 - Approximately 70 percent of financial and information technology
(IT) executives cite contingency budgeting as the most common method
used to address IT project implementation risk according to a survey
announced today by Gladwyne Software Surety, the leading provider of
risk management products and services for IT implementations. Results
reveal that many companies allocate as much as 50 percent over original
project budgets to plan for IT project failures. At a time when companies
are increasing IT budgets despite frequent IT project failure, the statistics
underscore the ineffective nature of current IT project budgeting and
management practices.
“It‘s amazing that while
the current business climate demands that companies be protective of
their expenditures and the bottom line, huge contingency budgets are
being set aside to plan for IT project failures,” said Dan Brennan,
Gladwyne co-founder and COO. “The answer is not put more money
against the problem. Today, IT project risk can be assessed, audited
and transferred altogether to a third-party with an insurance-backed
guaranty for a fraction of what companies are budgeting as a contingency
plan.”
The Gladwyne survey, titled “Strategic
Technology Implementations: ROI at Risk”, also demonstrates that
despite their recognition of the need to plan for IT project failure,
companies do not take an active role in protecting against such failures.
More than 80 percent of the executives surveyed believe that “best
practices” are established for enterprise application implementations
and wholly rely on their vendors to self-regulate and follow them.
Other methods for controlling risk
cited by survey respondents include hiring consultants and holding back
payment at various stages of project implementation.
“With an estimated $75 billion
lost each year on IT project failures, there is a clear market need
for the measurement, control and transfer of IT project risk,“
said Al Passori, VP, META Group. “The ideal scenario is one where
the IT buyer can reduce his or her company’s risk and protect return
on investment by enlisting the support of an objective third-party to
assess the IT project implementation plan for risks; audit the progress
of the project and facilitate issue resolution; and transfer the overall
project risk through insurance bonding.“
About Gladwyne Software Surety
Gladwyne Software Surety, Inc. is the leading provider of risk management
products and services for information technology implementations, meeting
the market’s call to reduce, control and transfer IT project risk.
Based on the proven risk mitigation methods of the construction industry,
the Gladwyne IT Risk Management Program provides an objective risk assessment,
ongoing project risk audit, and the first insurance-backed guaranty
for IT implementations in the market. For qualified projects, a surety
bond is included in the Gladwyne Risk Management Program to assure corporate
buyers that their project will be completed on time, on-target, and
on budget to increase return on investment (ROI). The Gladwyne program
marks a turning point in the technology arena by establishing true accountability
for technology implementations. Gladwyne’s investors include PA
Early Stage, a Safeguard Scientifics-affiliated fund (NYSE: SFE), The
Eastern Technology Fund, BaseCamp Ventures, CIP Capital, and selected
individuals. For more information about Gladwyne Software Surety, please
visit www.fortera.com.
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