CIOs are probably the people best placed to understand the potential for digital transformation in their organization. It’s their job to understand digital and their responsibility to re-architect the organization’s IT infrastructure to support innovation tomorrow and service delivery today.
But their role, and the IT estate they reside over, is changing dramatically, as is the extent to which they have direct control of that estate and spend. Software as a Service (SaaS), Infrastructure as a Service(IaaS), Platform as a Service (PaaS) and other service-based delivery models have enabled business units to purchase critical business software without the involvement of IT. 24 percent of IT leaders see IT spend controlled by other business units, while a further 19% say that control is shifting away from the IT department. That was the conclusion of research recently commissioned by Snow Software, which sought to better understand the changing balance of technology purchasing in the business, and the relationships between IT leaders and business units they serve.
Crucially, however, IT is often still held accountable for that spend and on the line for any overspend.. This creates several headaches for CIOs, and many are becoming concerned by the increased risk to data security, non-compliance and complexity of audit preparation caused by business units taking increased ownership of IT spend. This is happening because IT lacks visibility into technology spend by business units and is losing control of costs.
An opportunity amongst the threats?
However, this shift in IT spend presents CIOs with something of an opportunity to redefine their role and look for ways for the IT function to better support and align with the business to support their goals.
IT can become less a function for keeping the lights on, but one that’s more innovative and consultative, one that creates the technical infrastructure and control mechanisms that enable the organization to seize business and service opportunities in a reputable, secure, compliant and cost-effective way. To provide effective counsel and support, as well as remove the uncertainty and risk associated with unexpected technology spend, it is imperative that they are able to maintain visibility and control of all hardware and software assets in the organization, and that includes the cloud. Only then, can they become the true enablers of digital transformation.
The Cloud Conundrum
Service-based delivery models have been a key enabler in business units taking ownership of IT spend, and every good CIO recognizes the role the cloud plays in the digital transformation process. But business units don’t always understand the long-term cost, compliance and security implications or the infrastructure requirements needed to support those services.
If taken as read that business units IT spending power will increase over time, it’s concerning that today, over a third of CIOs (39%) say they can only determine what cloud applications are being used when acquired by IT. Equally troubling is the 26% of CIOs estimating – which could be interpreted as guessing – what is being used across the organization, having to reconcile costs after they are incurred.
Understandably, the lack of clarity and oversight caused by siloed IT spend and ownership is causing anxiety and risk within organizations, and the vast majority – some 83% – are to some extent concerned that cloud spend could spiral out of control.
So, with cloud computing a fundamental enabler of digital transformation, and IT spending power continuing to become more disparate, is it fair to say that CIOs and IT leaders will struggle to become the innovation partners within the organization that they perceive themselves to be?
Not so. The democratization of IT spending power, according to our new research, is actually making it easier for the CIOs to command boardroom attention, as the organization’s leadership gets to grips with digital transformation. CIOs must therefore position themselves as the go-to people for business units looking to fast-track new technology adoption and build better relationships with the business to drive innovation.
CIOs have a secret weapon in their arsenal that enables them to get the holistic view of their organization’s entire IT estate. A view required to provide the board with a single point of reference for spend management, risk assessment and technology asset management, regardless of who was responsible for bringing the technology into the business. The secret. Software Asset Management (SAM).
Building a platform for innovation tomorrow, means mastering the digital landscape today, and SAM solutions help CIOs eliminate wastage in their organization by managing duplicate, unused and under-utilized software subscriptions. The CIO can become the best friend of business unit heads across the entire company, helping them optimize their digital spend.
The genie is out of the bottle. IT spend that’s moved away from the CIO’s direct control isn’t going to be dramatically reversed any time soon, if ever. But by regaining a complete view of digital assets within the organization, IT leaders can focus on becoming the innovation partner business units are crying out for and the business needs if its digital aspirations are to be achieved.