Check out this article by Joel Spolsky on Good Programmers vs. Cheap Programmers. He goes through some of the reasons why software companies (not IT shops) need top notch developers/programmers to be successful and most importantly profitable. Also, check out Eric Sink's related article (written in 2003) on why you need developers and not programmers (again, geared towards ISVs). I think programmer and developer are interchangeable, but Eric defines what is a developer is (someone who contributes in multiple ways) and what a programmer is (someone who only writes code and sometimes fixes bugs and doesn't do much else).