CIOs: don’t declare war on business unit spending

Good CIOs will recognise that business unit goals are their goals and business unit metrics are their metrics.

Until recently, the CIO and business units tended to maintain a stable relationship. When it came to IT procurement, the business unit would request the desired technology from the IT office, who in turn purchased, developed and delivered the hardware and software solutions.

Although stable, the relationship has not always been harmonious. Business units were often frustrated by limitations around what technologies were available, and what they perceived to be unnecessarily long development cycles.

The rise in cloud-deployed applications has acted as a catalyst in this relationship shift. With specialised technical resources no longer required for cloud-based software procurement and deployment, a disruption gap has arisen. Business units are now operating outside of established governance and monitoring processes, leaving IT departments in the dark on what is being used and how.

>See also: Beyond technology: why every CIO needs to think like a business leader

Unsurprisingly, the decentralisation of IT decision making has left some CIOs feeling threatened. But there are also practical implications of this authority shift. A key element of the CIO’s role is to maintain the technology that business units purchase and effective planning and budgeting is nigh on impossible without insight into the full technology spend across the business.

Time to embrace change

The shift towards decentralised technology control and spend won’t be reversed, no matter how hard a CIO may push. In fact, Gartner suggested that while “in 2016, just 17% of IT spending [was] controlled outside of the IT organisation”, leaving 83% controlled by the CIO or the IT office, “By 2020, Gartner predicts that large enterprises with a strong digital business focus or aspiration will see business unit IT increase to 50% of enterprise IT spending.”

To be successful and weather the new challenges, CIOs must accept that the business units’ goals and metrics are their own. And while control may appear to be slipping away, they just need to better align the way they work with the wider businesses. But how can they do this?

Don’t hide your head in the sand – With business units increasingly driving IT spending, with the CIO and IT office too often kept out the loop, the resulting disruption gap creates fresh challenges for the CIO.

>See also: The role of the CIO in a digital age

Scrutinising spending and optimising existing developments is no mean feat without clear insight into the full picture of IT procurement across the business. But while this shift may be unwelcome, CIOs must face up to the facts. The first step towards resolving the challenge is to understand the forces driving the IT and business units apart, so they can in turn be realigned.

Maintain visibility of all technology spend and usage – Business units are purchasing and consuming SaaS and IaaS technologies at an ever-increasing rate to support digital transformation initiatives. While this decentralised approach creates new challenges for CIOs when forecasting budgets, adopting advanced analytical capabilities that provide detailed insight into how cloud services are being used can deliver crucial insight. With automated discovery of SaaS usage and the IaaS environment, the CIO can maintain visibility of all cloud assets cross the business, regardless of who purchased it.

Embrace the business unit – Cloud services are helping business units achieve their digital transformation goals of more agility and creating new solutions that are better aligned to their customers’ needs.

>See also: The changing role of the CIO and boardroom in 2017

Embracing the powerful shift that these new digital technologies are enabling across the business and proactively supporting business units throughout the procurement process to provide insight into solutions and leverage better deals, will enable the CIO to establish a position of expertise and influence over IT purchasing across the business.

Only once CIOs accept the changing situation, understand the forces that are driving the divide between the business and IT, and get a complete, accurate picture of technology across the company will they be confident in embracing business unit IT.

There’s no question that few envy the tough job that CIOs now face, with its pressing and evolving challenges. But it’s not all doom and gloom – influence can still be maintained over critical decisions involving IT and the cloud.

Understanding the wider business goals, retaining visibility of all adopted technologies and creating a vision for the evolving role of IT will all enable the CIO to keep the business “flying in formation” – avoiding a chaotic self-interested approach to technology procurement.

>See also: A guide for CIOs: how to drive digital business and mobility

But CIOs must be ready to embrace the shift from direct control to influence – ultimately, gaining complete visibility into what is happening across the network will pay great dividends.

In ensuring that they can provide the greatest expertise on existing and planned technologies, the CIO and the IT office can ensure they’re the business units’ go-to resource when planning future investment.

Without embracing this change, the CIO will not be able to make the crucial move from being the sole owner of IT to a broker of products and services that the business crucially needs.


Sourced by Tim Jesser, director at Snow Software

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Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

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