March 11, 2014 - A new CA Technologies (NASDAQ:CA) study confirms what many in the industry have suspected: technology spend outside of the IT department is growing rapidly. As software-driven business transformation becomes the norm and businesses use new applications to engage their employees and customers, this trend is expected to continue, and accelerate, in the years to come.
According to the study, "TechInsights Report: The Changing Role of IT and What to Do About It," the transformation of technology from a centrally managed IT responsibility to corporate-wide business enabler is upending the enterprise and reshaping the way technology is purchased, deployed and used. The consequences for IT leaders are enormous as they must now become senior advisors who influence and guide, and not only manage, a corporation's IT investments.
CA Technologies Chief Technology Officer John Michelsen commented on the study, "Software and technology are disrupting business models, creating new businesses from the ground up and even transforming entire industries. Customers are demanding new applications and a different experience, and employees require new tools to succeed and be productive. As a result, we are seeing a seismic shift in the way technology is seen, purchased, used and deployed across the enterprise. IT departments must evolve from single-source providers to business consultants, brokers and advisors, or risk becoming marginalized in the software and technology-driven economy."
Over one third (35 percent) of IT spend is now happening outside of the IT department, according to the 1,300 IT leaders from 21 countries who were surveyed. Respondents expect this trend to continue with lines of business responsible for 44 percent of IT spending within three years.
According to the study, activities such as driving new business initiatives (14 percent) or developing new, innovative products/services (11 percent) are not top of mind with most IT departments. Instead, traditional IT duties top the list—maintaining infrastructure and applications (41 percent) and fixing problems as they arise (35 percent).
Further, IT leaders are not doing enough to leverage technology to measure IT's impact on the business and to help the lines of business understand IT's value. Few frequently share key performance metrics (31 percent), evaluate the impact of shifts in investments (27 percent), or evaluate whether IT is meeting its KPIs (37 percent).
The influence of business lines on IT budget has reversed the historical mix that showed as much as 80 percent of IT budgets typically allocated to maintenance activities. Today, the total enterprise spend on IT across all functions and units has moved from maintenance or "keeping the lights on" activities to a heavier concentration on new services development and deployment. Respondents report a nearly even split today and expect the balance to shift in favor of innovation—to 59 percent—in three years as buying power continues to increase outside of central IT departments.
Vanson Bourne conducted the CA Technologies-sponsored study of 1300 senior IT leaders in financial services, healthcare, manufacturing, public sector and telecommunications in 21 countries around the world in May through July 2013. The study's respondents assume IT executive, management, project lead or enterprise architect positions at enterprises with revenues of $100 million or more.
