Fear-mongering in IT

Interesting enough, I have seen a good amount of fear mongering in the IT industry through working with multiple vendors in a large project. From pitching solutions to clients to hiring a potential employee, I believe its a widely used practice around. I have heard this too many a times. Please bear in mind I am NOT referring to a CEO, vice president or directors. I am referring to the senior managers and managers on the ground.

For example, another vendor said something like this "If you do not spend $500,000 on this functionality, you will be outdated and potentially lose alot of customers." In this instance, when you look at the numbers, it doesn't tally up nicely. Half a Million for a functionality that would save approx $20,000 a year and less than 1% of the client base is expected to use it. These people are really good at instilling fear into the management who doesn't understand much about IT. If you do not do this, you will be screwed... and interesting enough many a times they manage to get a useless functionality into the system.

The problem with IT is that alot of the mid - senior people in IT used to be developers / architects but many of them do not have extensive education, training and experience in managing the details of accounting, finance and economics. We do need to understand more in terms of how technology and money can work together for the benefit of the company. At the end of the day its not how fast your system can process a workflow but how much money can you make out of the whole system.