IT Leaders Concerned About Technology Spend Being Owned by Business Units

The explosion in cloud applications and Infrastructure as a Service (IaaS) has enabled business units to purchase critical business software and increasingly bypass the IT team when defining, sourcing and managing new IT initiatives. The research found that changes in IT procurement and consumption are driving a divide between business and IT.

Concern over business unit control

24 percent of survey respondents say at least half of their organizations’ technology spend is controlled by business units, rather than the IT team. In addition, 19 percent say control is shifting away from IT.

The survey revealed the extent of IT leaders’ concern as business units increasingly take ownership of technology spend.

• 90 percent expressed concern that audit preparation is becoming more time consuming and complex as a result.
• 83 percent are worried cloud spend will spiral out of control.
• 70 percent were concerned about the increased data security risk.
• 60 percent are concerned or very concerned about the increased threat of non-compliance.
• 41 percent are concerned about losing control and influence.
• 42 percent are lacking visibility into technology spend.
• 29 percent feel they are losing control of costs.

An opportunity for IT to become more strategic and innovative

Despite their concerns, 69 percent of survey respondents see the increasing business unit ownership of technology spend as an opportunity to better support and align with the business.

• 65 percent feel business unit involvement will not undermine agility and innovation.
• 49 percent believe that increasing ownership of IT spend by business units will provide an opportunity for them to personally focus on more strategic initiatives
• 30 percent also reported that the shift has made it easier to command boardroom attention, as the organization’s leadership gets to grips with digital transformation.

“There is no question that many CIOs are now grappling with the divide between business and IT as purchasing patterns continue to shift – a divide we call the Disruption Gap. However, CIOs needn’t fear this shift. This research illustrates that forward-thinking CIOs are adapting to become a trusted advisor to the business,” said Axel Kling, CEO at Snow Software.

“Increasingly, the CIO is required not just to define and lead individual projects, but to provide the CFO and the executive team with an understanding of technology budgeting, aggregation of spending plans across the organization (regardless of owner) and assurances that money is being spent wisely.” You can’t do that, says Kling without the correct solution. “These responsibilities are impossible to deliver without insight into technology consumption. This requires mature processes and actionable analytics.”

Click here to download the report: Why IT Needs Oversight If Digital Investment Is To Succeed