IT is losing control over tech spending

New research reveals that 37 percent of technology budgets are now controlled outside of IT departments, as tech spending becomes a larger priority for organizations across departments.

Roughly 79 percent of C-level executives think they can make better and faster decisions without the involvement of their IT teams, according to a new survey by Avanade. The report shows technology budgets and decision-making migrating away from IT departments, while IT takes on new roles in the enterprise.

With these shifting budgets and loss of control, the global study of 1,003 business and IT leaders shows what Avanade calls the new "services broker" model for IT taking hold. In this model, IT staff consult with departments across the business to better understand their technology needs and objectives, and source internal or external IT services or partners to meet these demands.

More than one-third (35 percent) of companies' IT departments act primarily as services brokers today, according to Avanade's research. Among companies whose IT departments are structured this way, 58 percent report they will expand the role of IT services brokers in the next 12 months. Additionally, 68 percent of companies report their IT department is contributing more to accomplishing business objectives than they did three years ago.

This is an increasing problem within retail organizations as they struggle to implement omnichannel efforts. Avanade's research confirms the findings of a recent Accenture survey that discovered 40 percent of retailers are having difficulty integrating back-office technology across all of their channels. Omnichannel efforts are demanding more of IT, requiring a consolidated, accurate view of real-time inventory across stores and distribution centers, according to that study.

Although 46 percent of decision makers surveyed by Accenture said they have a dedicated omnichannel team, conflicting priorities and organizational silos remain a key challenge as do barriers to sharing customer data and analytics between channels.

The role of IT is clearly changing, and changing fast (with one exception: 36 percent of IT staff report their time is spent managing and maintaining legacy systems).

"The tilting balance of control over technology decisions and budget has created a real tension between IT and the business and requires IT to rethink its approach, learn new skills and grow its influence," said Mick Slattery, Avanade EVP, Global Service Lines. "Forward-looking companies are positioning their IT staff as business advisors and see IT contributing more to accomplishing objectives, and driving positive business results than ever before."

For more:
-See this Avanade report

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