IT budgets suffer when in-house IT marketing fails

IT managers fail in their efforts to defend their budgets effectively in the face of continuing cutbacks because they lack appropriate communication skills.

In the past two years budgets have been savaged, because the value of IT is not recognised within Australian organisations.

IT departments need an advocate to lead the charge and win a greater share of the spoils, but IT manager at Sydney's Hotel InterContinental Ben Wrigley believes there is still a disconnect; while the struggle continues it fails to attract funding for budgets.

He said poor communication with senior management can galvanise the perception or IT as a "broken spoke" by the rest of the organisation.

This week Meta Group and Creative IT Marketing are set to release a survey of 277 CIOs and IT directors that found 70 per cent of respondents have had their budgets axed by more than 15 per cent over two years. Tellingly, the cuts could have been reduced by half if communication had been more effective, the survey report shows.

The survey found only 17 per cent of respondents had established formal marketing or communications programs for reaching out to business users.

Among the 83 per cent that lack such programs, IT budget cuts ranged from 5 per cent to 25 per cent during the past two years while those with marketing programs in place said their budgets remained flat.

Wrigley believes the intrinsically complex nature of IT and a general lack of understanding of IT by senior management are common obstacles. One of Wrigley's main communication feats in the past six months has been to push a project for high-speed Internet access for hotel guests. He said it required a fundamental shift in thinking among department heads and senior management as they had not realised the value in high-tech facilities as a way of improving customers' perceptions about service.

Wrigley said it was essential to educate the organisation that it could offer this service to all guests by foregoing certain expense items seen as core to the business, like soft furnishings or restaurant fixtures.

"Around 12 or 18 months ago this sort of IT [service] wouldn't have been possible, but by analysing the costs versus the benefits of this [project] to the business, I've got clear support and now the budget for it," he said.

Wrigley also advises IT managers to build a reputation within the business for living up to service level agreements so every pitch has an impact. Malcolm Fields, CIO at office furniture manufacturer HON Industries, said IT is tough to sell because organisations become sceptical in times of austerity.

As a result, he said, IT managers need to communicate effectively during boom times to alleviate the burden when times are tough. IT departments that fail to communicate the value of technology investments to senior management "do absorb larger budget cuts", software vendor JD Edwards' CIO, Mark Endry, believes. That doesn't mean IT divisions with internal marketing programs will be immune to the budget axe, he said, but savvy business managers can make more informed decisions about cuts.

But for some IT managers, "It's a matter of them not having any structure," said Creative IT Marketing president Patricia Jamarillo. "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." w -- With Thomas Hoffman

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