IT triggers growing amount of litigation

Litigation is increasingly being used to solve technology disputes, says consultancy KPMG Peat Marwick.

KPMG says the results of its survey into the way businesses install IT systems shows one fifth of those who have experienced problems with putting in a system have threatened litigation.

The survey of 130 bodies, including companies and government organisations, show-ed that 62 per cent had also suffered from a 'runaway system' - where a computer project had, during the last five years, exceeded by at least 30 per cent the original time or cost budget of ten man years or u350,000. It says 4 per cent of those surveyed had resorted to litigation, while 38 per cent had withheld payments in order to exert pressure.

Head of KPMG forensic accounting John Ellison says that business has some serious lessons to learn. "The cost to business and organisations of this disastrous phenomenon is immense and many take years to recover from the bottom line effect and the reduced morale it brings."

He adds that for over half of the respondents the runaway symptoms develop during the early stages of system development.

"This confirms KPMG's experience that many more runaway projects are misconceived to start with than are mismanaged from a sound starting point into a disastrous implementation."

The main problems identified by the survey are:

* project objectives are not fully specified;

* bad planning;

* poor project management; l unfamiliarity with technology;

* insufficient senior staff on team;

* poor performance by suppliers.