Kathy Gibson from the IDC CIO Summit, Sandton – The CIO is losing his grip on ICT budgets, with 80% of IT spending currently funded by line of business managers and out of the hands of the IT organisation.
Bill Keyworth, vice-president: research at IDC, says a survey shows that technology buying centres as we know them have permanently shifted.
Today, 23% of IT projects are implemented and funded by lines of business, with IT not being involved at all. Meanwhile, 17% of projects are shadow IT; 21% are joint IT and business projects funded by the business; 20% are joint IT and business projects funded by IT; and 19% are IT projects funded by IT.
“This means that 80% of decisions around technology will be made by lines of business,” Keyworth says.
In fact, business groups are building their own IT organisations – they are even employing IT personnel, with 8% of the staff members in line of business operations having IT titles.
“It’s not even shadow IT anymore,” Keyworth says. “It is out of the shadows.”
Among the reasons that IT is limited are that it takes too long to implement a new technology solution; it doesn’t track ROI in investment so the LOB can’t assess success; and IT approaches the problems with too much rigidity – business needs more flexible solutions.
At the same time, IT is becoming more valuable partner to business, with 72% saying they trust IT today and that it will continue to grow in relevance for the next three years.
However, the business wants IT to become more relevant to their own operations, recommending ways for the business to run more efficiently and to address business initiatives.
The CEO want IT to engage business stakeholders more effectively, create quick wins for business partners, simplify and standardise technology, train IT staff to partner better with business stakeholder, and deepen staff bench strength in management leadership.
This follows from the top business initiatives, which are to increase organisational productivity; optimise business processes, meet compliance requirements, improve customer acquisition and retention, increase cyber-security protection, expand into new geographic regions, introduce new and improved products and services; and create new IT-based sources of revenue.
Companies selling IT need to change their shift from products to services, Keyworth says. IT partners need to gain specific business domain knowledge and expertise; they should be able to sell to and support both business and IT; they should be an innovation partners; and should deliver services not technologies.
In terms of technology implementations, they must be able to translate, apply and implement new technologies to deliver business value; they need to experience new technologies; and become an implementation partner.
Soberingly, a massive one-third of IT partners are expected to not successfully make the transition and will fall by the wayside.