CIO Influence Shifts as Cloud Spending Rises

Unapproved, unsanctioned rogue technology has been sneaking its way onto the enterprise infrastructure for decades now with PCs, spreadsheet applications on floppy disks, Palm Pilots, and iPhones. Eventually all these technologies got ingested by IT departments, which took control of the oversight of all of these. Yet, the introduction of line-of-business cloud services, purchased by business managers for their individual departments, is a newer iteration of the old practice.

Unsanctioned by IT, these kinds of SaaS or PaaS are the shortcuts that individual business managers are using to get things done without going through the slow, painstaking process of requisitioning the technology through the proper channels. They can just spin it up in the cloud.

But with the bills getting bigger and the applications sprawling over more of the enterprise, what does that mean for centralized IT and CIOs? As cloud adoption may seem to have the impact of decentralizing IT and ceding influence to line-of-business leaders, there are still plenty of concerns that impact the entire business and that are best left to the experts in the IT organization.

For instance, what about costs and consolidation of those costs? What about governance and security? These are concerns that should be of great importance to both business and IT leaders, but that IT leaders are in the best position to manage effectively.

A new online survey of 450 IT leaders from companies in the U.S., UK, Ireland, and Germany with at least 1,000 employees found that although line-of-business leaders are gaining power because of these cloud purchases, IT is still most often responsible for budget, security, and compliance. Technology research and analysis firm, IDG, conducted the survey that was commissioned by Snow Software, a company that offers technology to help companies understand their cloud spending.

So it's not a surprise that IT leaders have concerns in terms of decentralized IT spending and costs around cloud spending in particular, integration with legacy technologies, and security and auditing, according to the study.

Approximately 62% of respondents identified IT integration challenges with legacy hardware and software as their top concern with cloud spending. Maybe because, depending on the research you cite, enterprise cloud spending can make up one quarter to one third of an organization's total IT spend, so it's not hard to see why IT leaders may have concerns over these issues.

What's more, survey respondents expressed concern that with the decentralization of IT spending they will be held responsible for something they can't currently control. More than half (59%) said that in the next two years they need to gain better visibility of the IT estate. Still, 52% said in that same timeframe they would have to obtain an increased understanding of who is spending what on IT within the larger organization.

But here's the surprise. IT leaders, for the most part, aren't against line-of-business organizations directing their own spending. Most of those surveyed, 65%, said they agreed that the current trend towards IT spending being owned by business units is good for the organization, and another 13% said they strongly agreed. The study summary noted that the shift could provide IT leaders with more time to focus on strategic tasks.

The survey also showed that IT leaders saw the shift enabling them to better command boardroom attention (54%), better investigate new ways to find an analyze the usage and cost of technologies (46%), and better find ways for IT to be more innovative and consultative to the business owners (45%).

Overall, IT leaders view this shift to cloud spending by line-of-business leaders as a mixed bag, with benefits and challenges.