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Tough times test the IT-business relationship

Tough times test the IT-business relationship

Do you hear that loud chop? It's the sound of the economic ax taking a big swing at your IT budget, and there's...

no better spark for a conflict between business managers and IT managers than a lack of funds.

"Usually, during a recession, IT budgets are cut way back. This has been true during 2001 and it appears to be so through at least the first half of 2002," said Fred Held, adjunct professor at the University of California at Los Angeles' Continuing Education School.

Held and others who have first-hand knowledge of the tensions that can lead to business-IT hostilities say these combatants fail to realize the symbiotic nature of their relationship. When the two sides work in harmony, they both benefit. The only true way to ensure harmony, however, is for top executives to make the expectations clear to all involved, these experts say.

Held said that since the 1960s IT executives have complained of business managers' inability to help justify investments in IT to improve productivity, while the business managers have complained that IT does not understand business. "Both are correct," he said.

"It is not so much a feud as it is a failure in top management to recognize the value of IT and get involved," said Held, who is also founder and CEO of Site-Tuners Inc., a company that specializes in Web-enabled processes.

"When top management understands that the firm will not succeed unless IT succeeds, they get involved and delegate and get rid of the abdication (of responsibility)," said Held. "When this occurs, real progress happens."

Misaligned with the bottom line

Through no fault of their own, IT departments tend to be misaligned with the overall business, experts say.

Steve Duplessie, founder of the Enterprise Storage Group, Milford, Mass., said businesses typically have unreasonable assumptions about IT's ability to deliver -- and it can only get worse in a recession, he said.

"Most IT shops are behind in their projects anyway, and now that the business climate has people panicking financially, it will only get worse," he said.

The key to keeping the troops in line when it comes to inner conflict in any organization is strong leadership, said Geoffrey Bock, a senior analyst with the Boston-based IT consultancy the Patricia Seybold Group.

"When the two groups are aligned with the same business focus they work in harmony," said Bock. "Any good CEO will make sure that (happens)."

Lessons from lean times

One of the fault lines for a potential business versus IT flare-up is the ability of each organization to generate revenue. But Bock said there are benefits to operating under difficult circumstances. When the economy rebounds and the money starts flowing again, business managers can emerge with a better understanding of how the IT component plays into the company's overall business objectives.

Until then, Bock said, the smart money will be spent cautiously. Business projects with high importance and a high return on investment are most likely to get the necessary funding, while IT experimentation will fall by the wayside.

One consultant who works with both IT and business managers has also witnessed this more conservative approach.

"There is certainly renewed focus on aligning IT directions (and) spending with business objectives," said John R Anderson, a consultant for IBM's Large Systems Market Support Center. "Whether that leads to friction or not depends upon the company."

Anderson, who steps IBM clients through hardware directions and ISV cost-management issues, said friction can develop when IT seeks control of resources at the expense of a business unit. Anderson said a decentralized solution is sometimes seen as offering the business unit more control, but the truth is it comes at a significantly higher cost to the company due to fractured resources and fragmented support structures.

"As companies come to realize this, we have seen a definite swing back to the centralized model of computing," said Anderson. "Perhaps the belt tightening in the economy is accelerating this trend."

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