If youve been listening to industry dialogue lately, you justifiably might be a bit perplexed. There are those who assert the worst is over for the ever-shrinking insurance IT budgetanalysts tentatively suggest there may be a few nickels more to spend in 2004 than last year. Then there are others (usually in the trenches) who believe IT spending will continue to be under the microscope and fully expect, say, a mandate for a 10 percent or 15 percent cost reduction year after year. These IT folks indicate they will comply because theyve got little choicethe sharks are circling, they claim, and they have to offer up some sacrifice to keep the sharks at bay.

Although the pendulum may be beginning to swing toward better times, well likely see both of the above scenarios in 2004 as we try to disengage ourselves from the economic treadmill weve been on and strive to move forward. If we view the future optimistically, industry insiders point toward certain key near-term projects where they believe theyll be spending their hard-won dollars (for more on spending trends and tactics for tight budgets, turn to Seeing the Light, p. 16). Of course, that still leaves unanswered the question of how to handle other cases in which additional cuts are required and may begin to hit bone or where larger-scale initiatives need to be implemented to remain competitive and meet customer expectations.

Whether companies are spending short or long term, or not at all, there needs to be a discussion to connect the dots for the business side regarding the cost of keeping costs down. Granted, no one wants to be the bearer of bad news, but not connecting the dots creates a void of understanding. In the business/IT partnership, thats become a missing link.