The IT department is fast becoming a brokerage house, an intermediary between buyers (as in lines of business managers) and sellers (as in cloud service providers). More than one-third of IT departments already act primarily as services brokers, and this model is expected to expand rapidly in the next 12 months, according to new research commissioned by Avanade, a managed services provider.
The idea of IT as a brokerage is just one aspect of the emerging role of the new CIO, one that looks more like a consultancy to the business rather than the keeper and controller of all things technical.
In their new role, CIOs will lose a chunk of their budget. They'll no longer drive initiatives to adopt innovative technology. They'll be asked to maintain legacy systems, in addition to building skills in cloud services and system integration.
CIOs as Value-Added Executives
If all of this sounds a little scary, don't despair: The new CIO will also gain more influence on technology decisions than ever before.
"Successful IT leadership of the future is less about control and more about how you add value to the business," says CIO Chris Miller at Avanade. "We're trading control for new responsibilities."
The global survey of 1,003 C-level executives, business unit leaders and IT decision makers conducted in February and commissioned found a dramatic shift in technology spending habits. Specifically, 37 percent of technology spending is now controlled by departments outside of IT, particularly marketing. This comes on the heels of a controversial Gartner prediction that CMOs will spend more on IT than CIOs by 2017.
For CIOs who cling to control over technology spend, it gets worse. The survey found that more than 70 percent of C-level executives and business unit leaders believe they can make decisions for their department better and faster without the involvement of IT staff.
To be fair, a recent Forrester report refutes the notion of IT spending moving out of the CIO's decision-making domain. Technology management groups, says Forrester, are still heavily involved in core technology processes like implementing digital experience platforms, application development including mobile development, managed services and integration.
CMOs Reallocate Spending to Focus on Digital
Measuring tech spending budgets and where they reside is a bit of a moving target these days. "We're not necessarily seeing budget shift out of IT," says Avanade's Miller. "If you look at the traditional marketing organization, where CMOs used to spend dollars on print ads, they're now spending that digitally, paid searches, new capabilities online."
CIOs are also getting pushed out of the new technology game, with startups pitching line-of-business managers directly. According to the study, an IT staff spends a third of its time managing and maintaining legacy systems.
Sign up for CIO Asia eNewsletters.