Are CIOs losing power?
- 15 February, 2014 15:00
There's a school of thought that IT departments - and CIOs - are disappearing. As more and more businesses buy cloud-based services, and turn to self-service and bring-your-own-device models, IT decision making is spreading throughout an organisation, some experts say.
A new study by Forrester illuminates the changing IT landscape. It found that the share of IT projects primarily or exclusively run by IT department will decline from 55 per cent in 2009 to 47 per cent in 2015.
The study did find a rise in the number of IT projects handled jointly by CIO-led teams and business groups. More than a third of IT projects today are collaborative ventures, handled at all stages by multiple parties in an organisation, Forrester says.
Only a little over 7 per cent of IT purchases are now done without involvement by the CIO, and they are mostly smaller tech procurements. Clearly, the Forrester study doesn't suggest that the CIO's job is headed for extinction, but its conclusions about how the CIO's role is changing are telling.
The shift to a collaborative IT decision-making process is something vendors have had to respond to.
"I think for enterprise selling, the world is dramatically different," said Mark Barrenechea, CEO at OpenText, an enterprise information management firm. The days of silo decision-making, where one person or department has control over a purchase "is almost gone," he said.
IT decisions are now mostly team-based and often involve the use of social networking tools, said Barrenechea.
Andrew Bartels, a Forrester analyst who worked on this study, said the tech buying process in organisations is complex. The business side of a company is "clearly much more involved" at the start of the purchasing cycle, but only a fraction of business units are controlling IT purchasing end-to-end today, he said.
For CIOs, the shift to a collabortive purchasing process means having to have a strong relationship with business partners. The CIO must make sure he or she is recognised as the go-to person for help on integrating technologies, ensuring they meet corporate policies, and getting the right price, said Forrester.
"Decision making in the enterprise has changed; it's become very complex," said Mohammed Farooq, chairman and CEO at Gravitant, a cloud brokerage firm.
Ralph Billington, managing director at Alsbridge, an outsourcing and network consulting firm, said the CIO does remain in charge of small purchases, or those of less than $5 million. "The CIO is in control there," he said.
What has changed, he said, is the responsibility for the big decisions, those driven by cost considerations. Those could be handled by the CEO and CFO, without CIO involvement, and might involve a decision to outsource some work.
Similar to what the Forrester data suggests, Billington said business units do sometimes bypass the IT department, often out of frustration that certain needs aren't addressed.
Billington areed that increased collaboration is a trend. While business unit leaders are more technically savvy, that also recognise they need the CIO to negotiate contracts, ensure security, support and maintenance are covered, and to deploy and implement tech products.