Case Study of Loose Budgetary Control in ISD Projects This paper investigates the tightness of budgetary control over projects in a large systems development multinational. This represents a case of extreme ISD failure en mass, where all but 2 of the 22 projects in a business unit went over budget, causing senior executives to refocus their strategic priorities and cancel all current and potential projects that followed. This study focuses specifically on the two best performing and worst performing of these projects.
Despite the fact that overspending is such a concern, little research has focused specifically on how budgeting or other general management accounting techniques are being used in ISD. An analysis of the relevant ISD literature shows that blame is attributed to the developers, managers or customers; the development method or process was flawed, inappropriate or obsolete, the team were not managed, directed and monitored sufficiently, or requirements were poorly elicited because the customers did not know their own business. Rarely if ever is the budget target itself ever questioned.
Studies that highlight these disastrous overruns provide little or no information on how the budget was set, how it was communicated, whether it was attainable, how adherence to the budget was monitored and controlled, or how it was integrated into the performance evaluation and reward functions of the project or organisation. In particular, attention has not focused on the tightness of budgetary control over ISD projects, which is somewhat surprising given the prevalence of unacceptable budgetary performance throughout the field..
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