Technology budgets and decision-making are migrating away from IT departments, while IT is taking on new roles in the enterprise.
These are among the findings of a large-scale global survey – including South Africa – by Avanade on the changing role of IT.
Thirty-seven percent of technology spending now happens outside of IT, because the vast majority of business leaders (79% of C-level executives) believe they can make better and faster decisions without the involvement of IT.
With these shifting budgets and loss of control, the global study of 1 003 business and IT leaders shows a new “service broker” model for IT taking hold. In this model, IT staff consult with departments across the business to better understand their technology needs and objectives, and source internal or external IT services or partners to meet these demands.
More than one-third (35%) of companies’ IT departments act primarily as service brokers today. Avanade’s research shows that among companies whose IT departments are structured this way, 58% report they will expand the role of IT service brokers in the next 12 months. Additionally, 68% of companies report their IT department is contributing more to accomplishing business objectives than they did three years ago.
Highlights of the survey include:
* Thirty-seven percent of budgets allocated in 2014 for technology is now controlled by business departments outside of IT. That means more than one-third of a company’s total technology purchases is made by business people who do not report to the CIO.
* The vast majority of business leaders – 79% of C-level executives – believe they can make technology decisions for their department better and faster without the involvement of IT.
* IT is increasingly playing the role of business advisor to both internal stakeholders and external partners. In fact, 83% of respondents said they are comfortable with IT staff interacting directly with important clients and partners in a consultancy role. And 66% of companies planning to expand the role IT plays as business advisors in the next year.
* To make this shift, business leaders want IT to build skills in key areas that will help them source innovative technologies that solve business problems for employees, customers and partners in an increasingly digital world. C-level executives report a need for more skills in cloud services (44%) and service and system integration (43%).
* Companies planning roles for IT as business advisors and service brokers see positive results. They report that IT staff has the needs of the employees in mind – 71% of C-level executives say the IT department today has “an employee-centric culture.” And 68% of these companies report their IT departments contribute more to accomplishing the objectives of the business than they did three years ago.
Even with these changes, time spent managing the same old legacy systems continues to distract the agenda for IT staff – 36% of IT staff’s time is spent managing and maintaining legacy systems. This leads to a situation known as “two-speed IT” where IT staff must balance the support of legacy systems with the need to continuously innovate in order to stay ahead of the competition.
“The tilting balance of control over technology decisions and budget has created a real tension between IT and the business and requires IT to rethink its approach, learn new skills and grow its influence,” says Peter Drube, country MD of Avanade SA. “Forward-looking companies are positioning their IT staff as business advisors and see IT contributing more to accomplishing objectives, and driving positive business results than ever before.”
