Are IT Failures Costing $6.2 Trillion Per Year?
from the um,-no dept
I'm always quite skeptical about huge numbers that come out of studies, such as the "losses" claimed by the entertainment industry due to piracy. So I was pretty skeptical of a story (found via Slashdot) claiming that IT failures cost $6.2 trillion per year worldwide. If true, that would be a staggering figure. I have no doubt that IT "failures" are costly, but that number seems extreme. Just glancing over the report itself, it's definitely not based on any kind of stringent methodology, and seems to count any IT project failure as a total loss, and then adds in "indirect costs" which sound suspiciously like "ripple effects" which, as we've demonstrated before are actually ways to double- or triple-count the same dollars over and over again. It seems that many others see huge problems with the original report as well, even to the point of suggesting that its orders of magnitude off.While the debate rages on over how to properly count the "cost" of such failures, I'm beginning to wonder how useful such a number is. Isn't a more useful discussion on how to prevent or minimize the impact of any such failures? The aggregate number may look good in being able to see some big number, but aggregate numbers can hide important details inside. For example, back in the early (and even late) 90s there were lots of reports about how computerizing your business was not shown to have added any productivity. A poor conclusion from this was that computering your business was not a smart idea. But the problem was that this was aggregate data. It failed to realize that many, many businesses had boosted productivity through the use of computers, and many of the large failures that wiped out the aggregate "gains" were from a few big businesses that did a really poor implementation. It didn't mean that computerizing was necessarily a bad idea, but that some of the biggest early players just did a bad job of it.
So, if we're going to be discussing IT failures, why not step away from that aggregate info and try to focus in on ways to actually minimize the impact of whatever IT failures might occur?
