Mixed feelings about technology initiatives moving outside of IT departments

Two-thirds of IT leaders say most of their technology spend is now controlled by business units. Is that a good thing?

For many IT managers and professionals, the growth of technology initiatives outside the IT domain and within lines of business is both welcome and dreaded. IT managers -- especially ones I talk to -- are very open to empowering end-users to pursue their own initiatives, and bring their own devices, and even independently subscribe to cloud services. It means more innovation with less stress on overworked IT departments to deliver results. However, it also means IT may have its share of messes to clean up when things go awry.  

img-0793.jpg

Photo: HubSpot

These mixed emotions are a recent survey of 450 IT executives and managers, who see opportunity in user-driven IT, tempered by nervousness about loss of control, runaway costs, security holes, and what the auditors will say. The IDG Connect survey, commissioned by Snow Software, reveals that some fears have been realized -- empowering business units has led to more complex audits, unchecked costs and security vulnerabilities. 

For starters, line-of-business IT is now the norm, rather than the exception. The survey shows that 67% of IT leaders said at least half of their spend is now controlled by individual business units. "Traditionally, technology purchasing and management was controlled by IT departments," the survey's authors state. "The cloud and as-a-service models shifted this dynamic, enabling employees throughout the organization to easily buy and use technology without IT's involvement.

Overall, IT leaders see this as a good thing. More than three out of four, 78%, feel the shift in technology spending is a positive for their organizations. "Decentralized IT spending is likely to deliver a number of positive outcomes, as a shift in roles offers tactical decision-making among business units via SaaS and IaaS procurement," the IDG authors state. This "leaves time for IT leaders to focus on more strategic tasks. However, these positive outcomes can only be achieved if IT departments build the right framework to enable different business units to procure their own technology."

User-driven IT really works out if, in the process, IT costs are kept transparent. If business users can weigh the costs of their technology against the benefits they are receiving, that's a real plus. "A critical part of this framework is ensuring that the costs, security and compliance requirements of software purchases are visible and understood throughout the procurement process. Only by doing this can the LOB feel empowered to procure and 'own' their technology, while reducing the burden on senior IT leaders." 

When looking at the pros and cons of outside-of-iT tech spending, the good appears to outweigh the bad. More than 40% see greater agility, as well as the ability of IT to be more strategic as a result. Still, 40% say they face more complex audits as a result. A similar number are concerned about IT's ability to better support and align with the business. 

With the shift of IT spend towards business units, what challenges does your organization face?

  • The organization becoming more agile and innovative    45%
  • IT being able to focus on more strategic initiatives    41%
  • Audit preparation becoming more time-consuming and complex    40%
  • IT being able to better support and align with the business     39%
  • Increased risk to data security     35%
  • Increased threat of non-compliance 34%

For IT leaders, the benefits of user-driven IT outweigh the risks. A majority, 54%, say it helps draw attention and interest in digital initiatives, while close to half suggest that it does open up transparency in IT costs. Similarly, close to half are seeing their roles elevated to more advisory roles to business leaders. 

What does the increased ownership of IT spend by business units mean for your role? 

  • Finding it easier to command boardroom attention as the organization leadership better manages digital      54% 
  • Investigating new ways to find and analyze the usage and cost of technologies      46% 
  • Looking for ways for the IT function to be more innovative and consultative to business units      45% 
  • Increasingly marginalized     33% 
  • Moving staff out of the IT team to become integral parts of business units     33% 
  • Being held responsible for something you can't control     32%

Decentralizing IT may bring about greater business-IT alignment, IT leaders agree. Close to two-thirds, 65%, say they're going to need to focus on greater alignment with the business over the next two years. A majority, 59%, also want greater visibility of their infrastructure on the near horizon. 

In the next two years, as business units exercise their power to initiate IT spend, how will you evolve your role as an IT leader? 

  • Align IT with business unit requirements        65% 
  • Gain better visibility of the entire IT estate        59% 
  • Better understand what is being spent on IT and by whom        62% 
  • Become a trusted advisor to business leaders         50% 
  • Become (more of) an innovation partner to support business goals       36% 
  • Focus more on controlling increasing cloud spend (excluding SaaS, IaaS and PaaS)         35%

Still, the idea of end-users working independently with IT services and vendors creates plenty of angst for IT leaders. While most believe this is beneficial for their organization, it presents new challenges when combined with increased cloud usage - 56% of IT leaders are concerned with hidden cloud costs and nearly 90% worry about the prospect of vendor audits within cloud environments. More than half of IT leaders expressed the need to gain better visibility of their IT assets and spending across their organization. 

IT leaders will be keen to avoid being hit by badly managed cloud purchases driven by LOB without their involvement. More than a third say they can only determine what cloud applications are being used across the organization when they have been acquired by the IT function. In addition, 59% say they will need to ensure they have better visibility of the whole IT estate over the next two years. 

 IT leaders also worry that decentralized IT leaves cloud spending spiraling out of control. In fact, more than three-fourths (78%) said audit preparation is growing increasingly complex and time consuming. Executives are justified in worrying about audits, the survey's authors add. Annual audits are now the rule rather than the exception -- 73% of those surveyed said they have been audited by at least one software vendor in the past 12 months.

(Disclosure: In my role as independent analyst over the past 12 months, I have conducted project work for IDC, a unit of IDG, mentioned in this survey.)