• Best Practice
  IT managers calculate the entire TCO across the length of the contract and ensure the business is not locked into a term that will limit flexibility down the road -- generally, any contract over two years long needs additional scrutiny. Clients build the key success criteria into the contract with the vendor (e.g. timeliness, quality, and support) and ensure that there's a warranty clause that allows them to test these elements in an exhaustive manner.


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• Common Practice
  IT managers rely on boilerplate clauses supplied by the vendor. Too much attention is paid to initial purchase price, as opposed to total cost of ownership. In particular, IT managers fail to protect themselves against the most likely risk involved in the transaction, namely that the vendor may fail to provide the product or service in a satisfactory manner.

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• Best Practice
  IT managers ensure that hard and soft benefits are kept separate. A hard benefit necessitates predictable and measurable cash flow into the firm, either through increased revenue, reduced costs, or improved asset leverage. A 10% productivity improvement generally does not entail any hard benefits, as the income statement of the firm remains unchanged.
• Common Practice
  IT managers are often pressured to build business cases that put prospective IT investments in the most favorable light possible. The result is that soft benefits are used for justification purposes, for example, as a component in an ROI calculation. The net result is that companies often fail to recoup the investments they make in IT.

• Best Practice
  Business Intelligence software is not a crystal ball. It will never provide answers to questions that aren't asked. Work with business units to determine the specific metrics that must be tracked and analyzed. In many cases, the reporting tools that the business currently has are sufficient.
• Common Practice
  IT managers feel harried by the business units to introduce solutions that will cut through data sprawl. They adopt a technology-driven strategy and issue requests for proposals (RFPs) to various software companies. After a long selection process and an even longer implementation cycle, they're no closer to finding the right information.

Don't Miss: 6 Ways To Contain IT Costs

• Best Practice
  The best businesses recognize that those projects that will result in higher revenue or will significantly reduce costs should have priority. But they also recognize that some opportunities disappear if delayed, and give them priority ahead of those that will not. They also recognize that some projects have higher risk of cost overruns and achievement of benefits. They give these projects lower priority than lower-risk projects with similar benefits.
• Common Practice
  IT managers adopt a priority-setting approach that gives highest priority to those projects that yield the most obvious progress. They fail to consider time-urgency or relative risk in setting priorities. As a result, projects are deferred and lose their potential competitive value. Highest priority is given to those projects with the shortest time frame to show "progress" even if it doesn't benefit the company.