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Who Decides What Tech to Buy?

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No matter what way you look at it, IT departments and Chief Information Officers (CIOs) still control technology purchasing decisions in most businesses. Despite evidence to suggest that the business side is increasingly involved in IT decision making, the buck generally stops at the CIOs desk.

According to new Forrester research, business-controlled technology decisions — meaning business executives choose, implement and run applications without CIO involvement — was as low as 6.3 percent in 2013, despite repeated claims over the past year by CIOs that they are losing control of IT budgets.

Can't We Just Get Along?

In an ideal world, it shouldn’t matter and there should be no conflict between IT departments and business leaders. The reality is still somewhat different. The research, Understanding Shifting Technology Acquisition Patterns, is not an attempt to add fuel to the fire created by an often strained relationship, but simply an attempt to understand what is happening.

In research published by IBM earlier this month, "pacesetting" enterprises in the SaaS space – those that had the highest levels of SaaS adoption – were also enterprises where IT and business had reached a happy balance with both sides of the business working together.

Unfortunately, in the overall group of SaaS adopters, this was the smallest group of all at only 19 percent of those surveyed.

For this study, carried out by Andrew Bartels, the reality is that cooperation appears to be the exception rather than the norm. The research was based on data from Forester’s Tech Industry economics database on the distribution of US spending by type of IT goods and services.

Bartels set himself the task of trying to estimate how much control of tech spending has moved away from the CIO and moved into the hands of line- of-business managers by looking at new technology purchases in the US between 2009 and 2015.

The conclusion, he said, was that business controlled 6.2 percent of spending in 2013. And by 2015, things won’t get much better, with just 7.2 percent of spending executed by business units without CIO involvement.

What's the problem with this? Well, it's business users that will have to use the technology once it  has been deployed. At that point, IT departments often step out of the equation unless something needs to be changed, or something goes wrong.

Tech Spending Balance

However, digging deeper, the picture is slightly more complicated. To say CIO’s control tech spending is a generalization that doesn’t entirely hold up.

Just like SaaS spending, the perfect situation is one where both tech and business works together for the good of the enterprise. In such a case, either side of the business identifies a problem, and both help find a solution or vendor that can resolve that problem. However, only about one third of all purchases will fit that profile by 2015.

In fact, in almost half of purchases, CIOs are making the decisions, even if that percentage is expected to fall from 55 to 47 percent over the same period. Another 10 percent will be new technology spending that starts with the business, but then pulls in the IT department for implementation and management.

It is not as straight forward as this with six different steps in the process of buying and owning technology. Those steps include:

  • Identifying need
  • Prioritize and fund project
  • Identify and choose vendors
  • Implement solutions
  • Manage vendor and solution
  • Renew or replace solution

By analyzing the degree of involvement that each part of the enterprise has in each of these stages, Bartels has managed to identify five different models for purchasing IT products.

If business units are heavily involved in the initial stages here, it is logical they would have little involvement in the latter stages like upgrades,or replacements, or even in the middle stages as applications and deployments need to be maintained.

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5 Tech purchasing Models

Before looking at these five models, for clarity it is important to keep in mind that Bartels has only used spending on new technology. He points out that if all technology was considered, the figure for IT and CIO involvement would be much higher, firstly because of maintenance and end-of-life considerations and, secondly, because in the past IT departments and CIOs had almost complete control of technology decisions. The five models he has identified are:

 

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