CIOs still in control of most IT spending, Forrester says

While business units are slowly gaining more influence in IT purchasing, CIOs should embrace this, according to the analyst firm

CIOs still have the last word over most IT spending but over time they will work more closely with business units on buying decisions, a Forrester Research survey finds.

Only 6.3 percent of new technology purchases in the U.S. were made and implemented solely by business units in 2013, according to the report's author, Forrester vice president and principal analyst Andrew Bartels. Some 9 percent of spending involved technology the business unit chose but the CIO's team implemented and managed.

However, "the ideal tech-buying process is one in which the business and the CIO's team work together to identify a need, find and fund a solution, choose the right vendor or vendors, implement it, and manage it," Bartels wrote in the report. "We estimate that more than a third of tech purchases will fit that profile by 2015."

Moreover, the share of tech purchases the CIO's group "primarily or exclusively makes" will drop from 55 percent to 47 percent by 2015, Bartels added.

Still, "pundits who make sweeping statements about tech spending shifting from the CIO's department to the business fail to appreciate the complex process involved in buying and owning technology," he wrote.

Business units' share of new technology spending went up from 2010 to 2012, fueled by purchases of smartphones and tablets, but this trend will wane as such items become part of consolidated IT budgets, according to Bartels.

Meanwhile, business unit purchasing of SaaS (software as a service) and IaaS (infrastructure as a service) is growing, "though the actual volume of spending is relatively small because many of these purchases have first-year costs measured in the tens of thousands of dollars," he added.

Although control over tech spending is shifting slightly away from CIOs, they shouldn't be alarmed, according to Bartels: "The fact that business users are taking the lead in identifying opportunities to apply technology solutions to business problems is a good thing, not something to be deplored."

But CIOs should make sure their relationships with various business executives are strong, so they will come to the CIO's office for help, he added.

While the report focused on the U.S., the same trends are likely to be found worldwide, particularly in countries such as the U.K. which have similar technology adoption profiles, Bartels said in an interview on Monday.

But many other countries aren't as advanced in their usage "and still tend to view technology through the lens of the IT department," he added. In those nations, the amount of tech spending led by business users is probably lower than in the U.S., according to Bartels.

Chris Kanaracus covers enterprise software and general technology breaking news for The IDG News Service. Chris' email address is Chris_Kanaracus@idg.com

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Tags IT managementinternetservicessoftwareForrester Researchhardware systems

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Chris Kanaracus

IDG News Service
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