The e-commerce revolution has helped turn IT into a vital part of any company's profit-making arsenal, cutting across business functions such as market development, product design, supply chain integration and sales, Busch said here today at Computerworld's Premier 100 IT Leaders Conference. The intelligent use of information in all of those areas is becoming more important than ever, he added.

But, Busch said, most IT departments are saddled with the need both to support those initiatives and to create new ways to save money through increased cost efficiencies -- a goal that doesn't necessarily lend itself to producing increased revenue for a company. IT managers "need to drive a very explicit discussion with our CEOs and [chief financial officers] about where we want to be in the [technology payback] model," he said.

Companies need to decide where they want to fall on the investment spectrum when it comes to their IT spending, Busch advised. That could range from viewing IT strictly as a cost center that should be tightly reined in to spending aggressively on technology based on the assumption that revenue growth will eventually justify the expenditure -- two extremes that he labeled as "very dangerous."

But coming to an understanding on that question may require more detailed discussions about IT than many companies currently have, Busch said. Although CEOs and corporate directors are more aware of how to use technology to help achieve their business goals, he said, in-depth talks with them about IT plans are still rare in many cases. "The fundamental dialogue ... needs to be a lot more explicit," he said. "It's still astonishing the degree to which [IT] is not understood in those venues."

Putting IT managers in the thick of the high-level planning and decision-making process would improve the way most companies use technology, but not if they focus on strict cost justifications alone, according to Chris Horrocks, president of consulting firm Strategic Advanced Management Systems Inc. in Barrington, Ill.

Focusing so tightly on costs "is almost the reverse of what you need to achieve for business," Horrocks said after Busch's speech. "Really, you need to be concerned with the upside of the game. You need to add benefits like market share." But, he added, IT managers who don't have profit-and-loss responsibilities face a serious weakness in business planning discussions. "When they enter into these debates with the big, strong barons running significant bits of the business, they don't have a chance in hell of [being credible enough] to make themselves heard," he said.

Christopher Sole, CEO of The Research Board Inc., a New York-based think tank that provides research services to the CIOs of 100 major companies, said IT executives are often too defensive about costs and not active enough in spelling out how technology can support new efforts to increase revenue.

"If they were more literate about the benefits and how to talk about them, then costs would become a more secondary discussion," Sole said. "Defending your costs at every step is the death of a thousand cuts."

However, Busch said IT decisions can match the need for both efficiency and revenue growth. Intel, for example, made a concerted effort to migrate many of its key business managers from desktop PCs to laptops. A related upgrade from Windows 98 to Windows 2000 improved stability and power management on the machines, helping justify the IT side of the equation, he said.

And once laptop use rose from about 20% to 65%, Busch added, business managers could get more work done while traveling and make decisions more quickly because they had ready access to important data while in meetings. Just the first of those two benefits might have been enough to justify Intel's investment in the operating system upgrade, according to Busch.

Once the decision has been made to roll out a particular technology, Busch said, Intel relies on a market-driven model to determine which projects actually help end users at the company do their jobs more effectively. Each new technology gets a baseline amount of funding from the corporate level, and business units then make use of the technology as they see fit and pay for their usage through through a chargeback system.

Busch said IT managers responsible for new technologies become very entrepreneurial, trying to tweak and adapt them to match the needs of Intel's business units. Technology that proves itself useful to business managers with profit-and-loss responsibilities grows within the company, he noted, while projects without a clear buy-in are left to die off. "We've found that [users] were making intelligent decisions about what they're using and how they're spending their time," Busch said.

For more Computerworld Premier 100 conference news, head to www.computerworld.com/premier100.

Related stories:

• Latest trends from IT's rank and file, May 14, 2001
• IT training tax-credit bill filed in the House, May 10, 2001
• Dot-com bust a mixed bag for IT staffing, May 7, 2001