Question

More than 40 percent of information technology (IT) projects do not produce a satisfactory outcome. The average company spends more than $1 million a year for these unsatisfactory outcomes. An estimated ten percent of a typical organization’s IT staff worked on projects that have no business value. What controls will need to be initiated as an accountant to resolve these issues?

Answer 1

Just like a healthy diet can make a person look more attractive on the outside, following six ways and steps taken by accountant control the IT project with no business value.

1. Better Marketing :- Accurate and up to date accounting helps you to make better revenue forecast for your company. Revenue forecast aren't just for budgeting and future planning. They can also be used to help understand whether your current marketing efforts are working, or whether they are missing the mark.

2. More financial stability :- Accurate accounting helps your business create and control company budgets to know when and how money is coming and going from business. It can also help to plan for enough cash reserves to see you through cash crunch. Sometimes it's possible to cut costs while maintaining quality but other cost-cutting measures impact customer satisfaction and loyalty .

3. Investment in quality and efficiency :- Accurate accounting helps business owners consider the ramifications of making decisions about major investments.Could new software have a significant impact on your processes? Could it delight clients by improving turnaround time or providing a higher quality service? Without up to date financial data it's difficult to know when is the right time to make such investment.

4. Hiring and maintaining happier employees :- Accurate accounting is crucial for human resources .Timely financial data helps to know when to bring on additional staff. It can mean the difference between having a profitable year and being in the red. Once you've hired the right people, it's the time to keep them happy. Having happy clients starts with happy employees .

5. Fraud prevention :- When you have a handle on your business accounting , you are comparing transactions that hit your bank account to your IT company's checkbook, comparing actual expenses to budget and otherwise taking a careful look at the money flowing in and out of your business .

6. Controlling costs:- Every IT business has a finite amount of resources . Your company's accounting records contain data that can help with decision making for everything from improving operations to responding to customer needs and measuring outcomes .