Mailbag: Tight budgets

A couple weeks ago I wrote about my theory that there’s pent-up demand for management tools because of the lack of recent investment in IT. I received a few responses – two of which were a bit distressing, if they represent is what is happening in companies out there.

One reader’s job, which involved directing all IT projects and investments, was recently outsourced. Here’s the approach that his company is taking:

“It appears to me that our company will gladly do without what they cannot outsource. Top management confirmed several times that they will pay for no management tools whatsoever, and whatever management tools are applied must be supplied by service vendors or organizations to which various services have been outsourced. There is no ‘demand’ for management capabilities or service optimization, no matter the business argument. Nothing short of complete business failure will cause management to revisit this commitment. I know this because we have had many service failures due to security and bandwidth problems, and the response has been to live with the problem until the service can be outsourced, or the need for the service goes away.”

He also related that IT was not the only victim of this finance-led approach to managing the company. The purchasing manager was also laid off because management decided that the position had little value for the company. In addition, the purchasing processes were abandoned.

This company seems to be suffering from short-term, bottom-line thinking. Although there may be a quick, short-term improvement to the company’s income statement, the long-term effects on the company’s business may be crippling.

Another reader reported that demand is growing where vast amounts of information are being handled. The reader’s IT department saw the need to have “some kind of 50,000-foot view,” but that was when budgets were being held back. It needed dashboard-style displays of performance, throughput/efficiency measurements (that are standardized to be relevant regardless of platform) and enterprise project management with notification, planning and flexible management tools. But because of the lack of budget to purchase a tool, they decided to create their own tools in-house.

These responses were very interesting. While not the ideal, it looks like IT shops are struggling to keep on doing their jobs despite budget cuts and despite a lack of commitment from the financial side of the business. I do hope that the climate will change for companies like these, but in the meantime, it’s imperative that although funds may be short, executives still must maintain their commitment to IT.