Technology spend is shifting from the CIO to the business

17 July 2019 Consultancy.eu

The top IT boss, the chief information officer, is gradually losing direct control on the overall information technology spending. More than sixty percent of large companies worldwide now allow investments in digital and technology to be led by non-IT departments, according to a new study by professional services firm KPMG and recruitment agency Harvey Nash.

Traditionally, the IT department and ultimately the CIO spearheads IT budget and the allocation of resources. However, with digitisation having grown to an efficiency and innovation driver for practically all areas of organisations, the accountability for IT spending is as a result diffusing.

The study by KPMG and Harvey Nash among around 3,600 CIOs in nearly one hundred countries found that almost two thirds (64%) of organisations allow a share of their technology spend to be managed by the business – including sales, marketing or supply chain departments. One in ten organisations even encourage non-IT departments to exert influence on tech investments. 

Organisations are dispersing their IT spend because “there is no longer business strategy and technology strategy, it’s simply strategy with technology driving it,” explained Steve Bates, KPMG’s global leader for CIO services.Technology spend is shifting from the CIO to the businessThis shift in accountability of digital investments comes against a backdrop of record spending on automation, found the authors. “This year we have seen the largest proportion of organisations increase their investment in technology in 15 years, and the height of these increases too are on average at their highest point in this period. Even with enterprises where the emphasis is on efficiency and saving money, investment in technology is increasing. Whatever the problem, technology seems to be part of the answer,” they write in their report.

In particular, investments in cybersecurity, data analytics and automation within operations are driving this trend. Artificial intelligence, touted a game change for a range of sectors, including energy and utilities and the retail industry, also ranks among the highest in-demand areas of investment.

However, the authors highlight that having non-IT departments manage IT budget also comes with its risks. One of those is keeping control of privacy and cybersecurity risks. Organisations that allow business-managed IT face twice as many security risks, and a significantly larger risk of being a victim of a large cyber-attack. Another is the fact that it asks a new way of working internally, among other areas requiring line managers to have deeper knowledge of IT business cases and project managers to master their digital skills, while business and IT as a whole need to forge a new type of relationship.

Organisations that get the mix right between IT-led spending on automation and business involvement are however well-positioned to reap the benefits. They are according to the researches much more likely to be significantly better than their competitors across a host of factors; in particular in the commercial side of business opportunities, as sales and marketing leaders can leverage intelligent IT spend to better understand customer behaviour, improve the customer experience and realise a shorter time-to-market.

“This research clearly shows that organisations putting technology in the hands of value-creators and connecting the front, middle and back office are winning in the market. The future of IT is a customer-obsessed, well governed, connected enterprise,” concluded Bates.


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