The Peanut Butter Syndrome

Computerworld - The recession has forced most IT organizations to cut their budgets, projects and staffs. Companies often believe that by putting all IT expenses into a single budget and squeezing that budget hard enough, they can force total IT expenditures down to some arbitrarily predetermined level. But IT's purpose is to enhance business productivity. If the central IT budget is overly constrained, the business units will bury IT costs in their own budgets.
The result is the "peanut butter syndrome." If you hold a lump of peanut butter in your hands and squeeze it hard enough, eventually some of the peanut butter will squish out between your fingers. Similarly, when the central IT budget is squeezed too tightly, IT spending will spill into other budgets.
Many business units still have unique IT needs that must be met in order to improve business results. Unfortunately, as a result of the retrenching of the past few years, the CIO often doesn't have the staff or budget to fulfill those needs, and many business units no longer view central IT as their partner. As the economy grows and business units have more discretionary dollars, peanut butter IT will expand. Business units are doing end runs around the central IT organization, buying hardware as "plant and equipment," and hiring IT consultants and technical staffers as "analysts." Meanwhile, architectural standards are compromised, the total cost of IT is under-reported, and the perception of IT's usefulness is undermined.
In most organizations, it's unrealistic to expect to be totally peanut-butter-free. But peanut butter is sticky, messy and hard to remove. Help prevent the spread of peanut butter syndrome by taking the following steps:
• Understand the business units' challenges. Even if you don't have the budget to start new development projects, you need to understand each business unit's problems and help it get the IT support it needs. If possible, help the unit build a business case. In the process, you may jointly discover a way to meet its needs through an existing system. In any event, the business case will help it more clearly articulate its needs, as well as identify any re-engineering required to make the new system successful.
• Help the business units creatively transform peanut butter projects into official projects. One of my firm's clients had to lay off IT staff when her development budget was severely cut. Six months later, a business unit created a compelling business case for a new project. Although the CIO agreed that it was desirable, she didn't have