There have been a number of articles and blogs recently which question the future of the CIO, including this fine piece by CIOZone Contributing Editor Michael Neubarth. Another report, citing statistics compiled by Diamond Digital, claims that nearly one-third of IT spending occurs outside of the purview of the IT organization, thus calling into question just how much influence a CIO can possibly have if such a big chunk of IT spending is decided without his or her input.
It’s a legitimate question. But rogue IT spending has been a pervasive problem for CIOs for years. And while every CIO should review any IT purchases, including cloud computing and SaaS, to determine the ramifications on security and IT infrastructure, having line of business leaders selecting software, hardware or services for their divisions doesn’t necessarily translate into a sign that a CIO is losing clout in their organization.
It may, however, signal other warning signs that CIOs and CXOs should be aware of. For instance, some independent business leaders may turn to third-party vendors and IT services providers on their own if they’re frustrated with how long the systems review and selection process takes within their organizations. Business leaders also turn to vendors on their own when they feel like they can get a better deal on IT gear than by working through their IT organization.
I brought this issue up during a presentation that was made today at SAS Global Forum in Seattle on “The State of IT” which was given by Bob Melk, Senior Vice President and Group Publisher for CIO Magazine. I asked Melk his opinion about rogue IT spending and whether CIO Magazine has conducted any research on the topic. Melk says that the magazine conducted a joint research effort with Forrester Research last year in which the magazine posed a set of questions to CIOs about rogue IT spending and Forrester did the same with line of business executives.
According to Melk, both the CIOs and the business leaders reported that the bulk of IT spending continues to rest within the control of the IT organization.
Even solid IT leaders aren’t able to stop all rogue IT spending. But I bet it happens less often under CIOs who offer competitive pricing, quality service and are responsive to the business’ needs.
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