ALKHOBAR, 19 June 2007 — A survey of 1,125 information technology professionals based in the Americas, Europe, the Middle East and Asia-Pacific reveals a clear link between slower delivery of IT projects and services and lower business profitability.

The recently released study conducted by The Economist Intelligence Unit on behalf of HP, identified unacceptable levels of IT delays. In nearly half of companies surveyed, 25 percent or more of IT projects are delivered late; and in 57 percent surveyed, no more than one in two IT initiatives produces positive business outcomes.

In the UAE specifically, the numbers were 64 percent of companies delivering one in 10 projects late and just 36 percent, one in four projects late. IT projects seemed to have better outcomes as well in the UAE, with 72 percent stating that more than one in two IT initiatives produces positive business outcomes.

The primary consequences of delays in IT projects include delayed product launches, loss of anticipated revenues and delays to planned cost savings — all of which impact company profitability.

“In business, speed is increasingly of the essence. It is cause for alarm then that so many of those surveyed deliver IT projects late,” said Denis McCauley, director, Global Technology Research, The Economist Intelligence Unit. “Companies that succeed in accelerating IT project and service delivery have a significant advantage, while those that do not may suffer at the hands of the competition.”

The survey showed that in the UAE, 48 percent of the delay in IT projects is due to lack of coordination while 52 percent attribute it to the use of external outsourcing and 40 percent to the changes of business priorities during the implementation of the project.

In the overall survey, in firms where 75 percent or more of IT initiatives in the past three years have had a positive business outcome, improvement in the speed of service delivery has been considerably higher than the average. In high-performance firms — those reporting a rise in profit of 25 percent or more over the same period — speed of service delivery has also improved more than in others.

The survey showed that accelerating speed of delivery does not have to adversely affect quality or positive business results. When project overruns do occur, the culprits are usually midstream changes to business priorities and poor coordination between IT and business managers. Better definition of business requirements, greater investment in IT process automation and more collaboration across IT functions are the primary solutions for accelerating time to delivery.

“The new reality is that technology doesn’t just support the business — technology powers the business. IT risks are now business risks,” said Samer Karawi, marketing director, Technology Solution Group, HP Middle East. “Today, CIOs are measured on overall business outcomes such as how fast they can help the company launch new products and bring new distribution channels online. It’s no longer just about delivering only on technology service-level agreements.”

Questions and findings highlighted in the survey include:

“Approximately what percentage of IT projects undertaken in your company over the past three years has been delivered later than originally planned?” Global findings: 0 percent of projects = 9 percent, 10 percent = 43 percent, 25 percent = 24 percent, 50 percent = 13 percent, 75 percent = 7 percent, 100 percent = 4 percent. UAE specific: 0 percent of projects = 0 percent, 10 percent = 64 percent, 25 percent = 36 percent, 50 percent = 0 percent, 75 percent = 0 percent, 100 percent = 0 percent.

“My company would experience a substantial increase in profitability from the faster delivery of IT services and projects.” Global findings: Agree 62 percent, Disagree 29 percent, Don’t Know 9 percent. UAE specific: Agree 56 percent, Disagree 40 percent, Don’t Know 4 percent.

“What have been the most common consequences of late delivery of IT projects in your organization?” Global findings: Delayed launches to new products/services 41 percent, Loss of anticipated revenue 37 percent, Not making planned cost savings 34 percent. UAE specific: Delayed launches to new products 60 percent, Loss of IT jobs 36 percent, failure to integrate businesses or departments in M&A situations 32 percent.

“Approximately what percentage of IT initiatives undertaken by your company in the past three years has had the intended positive business outcomes (impact on your company’s business?)” Global findings: 0 percent of projects = 1 percent, 10 percent = 19 percent, 25 percent = 17 percent, 50 percent = 20 percent, 75 percent = 27 percent, 100 percent = 16 percent. UAE specific: 0 percent of projects = 0 percent, 10 percent = 20 percent, 25 percent = 0 percent, 50 percent = 8 percent, 75 percent = 56 percent, 100 percent = 16 percent.

The EIU white paper, “Technology at the Speed of Business,” is available for download at www.hp.com/go/software.