A new CA Technologies study confirms what many in the industry have suspected: Technology spend outside of the IT department is growing rapidly. As software-driven business transformation becomes the norm and businesses use new applications to engage their employees and customers, this trend is expected to continue, and accelerate, in the years to come.
“TechInsights Report: The Changing Role of IT and What to Do About It”
According to the study, “TechInsights Report: The Changing Role of IT and What to Do About It,” the transformation of technology from a centrally managed IT responsibility to corporate-wide business enabler is upending the enterprise and reshaping the way technology is purchased, deployed and used. The consequences for IT leaders are enormous as they must now become senior advisors who influence and guide, and not only manage, a corporation’s IT investments.
CA Technologies Chief Technology Officer John Michelsen commented on the study, “Software and technology are disrupting business models, creating new businesses from the ground up and even transforming entire industries. Customers are demanding new applications and a different experience, and employees require new tools to succeed and be productive. As a result, we are seeing a seismic shift in the way technology is seen, purchased, used and deployed across the enterprise. IT departments must evolve from single-source providers to business consultants, brokers and advisors, or risk becoming marginalized in the software and technology-driven economy.”
Over one third (35 percent) of IT spend is now happening outside of the IT department, according to the 1,300 IT leaders from 21 countries who were surveyed.
Respondents expect this trend to continue, with lines of business responsible for 44 percent of IT spending within three years.
According to the study, activities such as driving new business initiatives (14 percent) or developing new, innovative products/services (11 percent) are not top of mind with most IT departments. Instead, traditional IT duties top the list—maintaining infrastructure and applications (41 percent) and fixing problems as they arise (35 percent).
Further, IT leaders are not doing enough to leverage technology to measure IT’s impact on the business and to help the lines of business understand IT’s value. Few frequently share key performance metrics (31 percent), evaluate the impact of shifts in investments (27 percent), or evaluate whether IT is meeting its KPIs (37 percent).
The influence of business lines on IT budget has reversed the historical mix that showed as much as 80 percent of IT budgets typically allocated to maintenance activities. Today, the total enterprise spend on IT across all functions and units has moved from maintenance or “keeping the lights on” activities to a heavier concentration on new services development and deployment. Respondents report a nearly even split today and expect the balance to shift in favor of innovation — to 59 percent — in three years as buying power continues to increase outside of central IT departments.
Click through for findings from a CA Technologies study on the changing role and responsibility of IT within the enterprise.
The IT department is no longer the only one making sizable IT investments. In fact, more than one-third (35 percent) of IT spending is occurring outside the IT department today – and that number is expected to grow to 44 percent in three years.
IT spending overall is moving away from “lights on” toward new business initiatives. Spending on new products and services is expected to grow in the next three years, from 49 percent to 59 percent of the total IT budget.
Thirty-nine percent of respondents now see the IT department as a service broker or consultant to the line of business, rather than a sole-source provider of IT services.
Over 70 percent of IT staff see big changes ahead for the role of IT in business, but there is no consensus on who in the organization will be responsible for IT.
While the IT department will still have a role in managing, securing and fixing the organization’s infrastructure, data and apps, that role will shrink as business-oriented responsibilities give IT an opportunity to be more strategic to the organization.
The research also shows that today’s IT organizations are not quantifying the value they provide to the business, further lessening the importance of their role.
There is an appalling lack of use of modern software tools for tracking and communicating back to the business. While the majority of respondents (53 percent) are frequently tapping “what-if” analysis tools for IT planning, the numbers drop when the metrics pertain to measuring the benefits of current IT investment (39 percent) and understanding how a shift in investment will impact the business (27 percent). This type of information could show the business how IT saved money, increased revenue, and more.