What we have here is a failure to communicate. According to a soon-to-be released survey of 277 CIOs and IT directors, nearly three-quarters of the respondents said they have had to cut their budgets by more than 15 percent over the past two years and that they think more effective communication with senior management about the value IT generates could have reduced those cutbacks by half.
The e-mail survey, conducted during last year's fourth quarter by Stamford, Conn.-based Meta Group Inc. and Creative IT Marketing, a New York-based consulting firm, is expected to be released this week. One of the survey's findings is that few IT departments -- just 17 percent of the respondents -- have established formal marketing or communications programs for reaching out to business users.
Among the 83 percent that lack such programs, IT budget cuts ranged from 5 percent to 25 percent during the past two years, according to Meta and Creative IT Marketing. Meanwhile, most of the respondents with IT marketing programs in place said their budgets remained flat.
Perception Problem
Several IT managers acknowledged that communication with business executives can be a big problem.
"Unfortunately, I do believe that many IT executives do a poor job of communicating and marketing the value of IT," said Malcolm C. Fields, CIO at HON Industries Inc., a Muscatine, Iowa-based maker of office furniture and fireplaces. Trying to change the perception of IT's value after the threat of budget cuts arises "is very difficult because most organizations become skeptical in times of austerity," said Fields. That's why it's essential for IT managers to communicate effectively during boom times, he added.
IT departments that fail to communicate the value of technology investments to senior management "do absorb larger budget cuts," said Mark Endry, CIO at software vendor J.D. Edwards & Co. in Denver. That doesn't mean IT organizations with internal marketing programs will be immune to the budget ax, Endry said. But business managers who understand the impact that IT has on their companies can make more informed decisions about cuts, he added.
Glenn Palmiere, CIO at G. Pierce Wood Memorial Hospital in Arcadia, Fla., said that when times are tough, some IT projects will fall prey to budget cuts no matter how mission-critical they may appear to be.
Palmiere said his group "continually cost-justifies every dollar we spend" based on the value that IT can provide to end users at the hospital. Without the internal marketing that the IT department has done, "the cuts would have been more severe than they have been," he said.
Amy Courter, vice president of IT at Valassis Communications Inc., a marketing services firm in Livonia, Mich., said she has found that through one-on-one communication with business executives, she "can often achieve the results that I need -- with a lot of work."
But for some IT managers, "it's a matter of them not having any structure," said Patricia Jaramillo, president of Creative IT Marketing. "There are a lot of them who send out e-mail updates [to senior management] that are very technology-focused and don't express the business side."