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10/17/2012
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IT Has Changed, But IT Budgets Haven't

IT's role is shifting to focus more on innovation and driving revenue. So why are budgeting practices so stuck in the past?

Mobile, Cloud, And Marketing

As business units start buying or bringing in their own cloud services and mobile devices, it's easy to get caught up in the hype and predict the end of centralized IT. Most everyone can buy from Amazon Web Services without IT intervention, so why should our next enterprise app need IT support? Best Buy and 4G hotspots for everyone!

Consumerization, cloud, and social and mobile marketing are all incredibly important trends that are creating chaos for IT, but a little bit of critical thinking is in order. Just because there's some business unit funding for these efforts doesn't mean that all funding tied to them gets decentralized. For example:

>> Consumerization: Yes, 31% say business units have some BYOD funding, such as stipends for phones and tablets. But does anybody really think the marketing and finance folks are going to figure out how to implement such devices in a secure manner that satisfies company confidentiality, integrity, and availability standards? BYOD causes enough security problems without turning responsibility for it over to amateurs. Business units may control device stipends and choices, but they won't control the overarching security and wireless infrastructure, as well as their companion technology, mobile device management.

>> Software-as-a-service: Twenty- nine percent of the respondents to our survey say business units at their companies have their own funding for SaaS. But there are deeper implications when an IT organization rents, not owns, critical infrastructure, including uptime and the risk of giving up control of assets critical to the health of the company. Despite the lemming-like rush to SaaS, many critical applications will stay on premises because of long-term ownership issues.

>> Marketing and social media: Will marketing departments pick up and perform IT's duties? "I think it's nuts," says Tom Smith, director of operations and marketing for the U.S. subsidiary of Anua, a provider of wastewater management and other control systems. Smith has been in marketing for 30 years, and he notes that his company still relies on design, copywriting, and other third parties to do some of its core work. As the director of operations, he also supervises an outsourced IT organization, but he has no illusions that the infrastructure or security duties of a centralized IT operation can be performed by marketing folks.

At Sears Holdings, the IT team is trying to push analytics work into the business units, giving them tools to write their own queries on data, for example, rather than have to ask IT for a report. But IT still runs the infrastructure to deliver the data, and it does the complicated architecture work to make sure data is accessible and quickly available.

Could marketing end up spending more than the IT department on technology--or even controlling IT? There have been crazier, Dilbert-worthy fads. And perhaps it could make sense at some marketing-driven companies. But keep this notion in perspective. For a long time, IT reported to finance at most companies. Some banks now have IT report to an operations and technology executive. But that doesn't mean that central IT goes away, any more than central IT disappeared back when IT reported into finance. Someone will still need to budget centrally for "whoever" is going to handle critical internal infrastructure, security, data integration, etc., unless someone thinks it's possible to coordinate the chaos of IT staff, projects, and budgets in every business unit making its own tech decisions.

chart What percentage of IT services are budgeted in your central IT organization?

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