Jim, Denis, Sergey and Thomas,
First - thank you for answering!
It seems that the consensus is that it (the name) doesn't really matter. I actually got the same impression from my boss - the change came about in connection with the name change of another department.
At first I am inclined to say it does not matter a bit. Someone in the company used to call us "Propeller Heads", which I found funny, but what if the department name really was PHD? Could standardization be a valid reason? It did happen to me that people inside and outside the company did not know what MIS stands for. It could happen with IT too, but maybe less frequently?
Some of you mentioned 'waste of money'. That could be a hidden side effect. The company doesn't provide business cards, and there won't be any party. But we do have department codes all over in our data files, and there might be other things...