The number of failed and ill-defined IT projects is continuing to grow as IT departments struggle to be seen as anything other than a cost to the business and a drain on resources.

Speaking at an IT Week conference on service level management, chief executive of the IT Service Management Forum Aidan Lawes warned that the gulf between business and IT is still huge.

"Ten years ago, the majority of IT services were delivered to some other human being within the organisation. Now technology is in the front line. Eighty per cent of people who go to a website and are dissatisfied will walk away never to come back," he said.

But IT continues to be seen as a support function in the same light as catering or security.

Budgets are seen to be out of control, and quality of service is seen as poor, often because there is a mismatch of perceptions between business and IT, Lawes warned.

"IT is seen as not being responsive to business needs and costs are seen as opaque. Not only is IT seen as a bottomless pit, they don't know what they're getting for it," he said.

He suggested that any of the good IT disciplines for managing technology honed during the mainframe era had been lost with the advent of distributed systems.

"There are too many IT degree courses where people come out unable to operate in the real world. And there aren't enough MBAs about how technology can be harnessed to support the business," said Lawes.

"We need to radically rethink the role and structure of IT. That means getting the business to focus on value not cost, and on process and people not technology. We need to think end-to-end service."

Alain Dang van Mien, research director at Gartner, maintained that IT's objective is to deliver and show improvements in the business.

But the analyst predicted that only half of all companies will have implemented business-focused service level agreements by 2005.

Gartner warned that IT departments need to shift their focus away from technology and towards business metrics including return on investment, total cost of ownership and improving business services.