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C-level executives wrest control of tech budgets from IT departments

IT departments are increasingly losing control over technology budgets with business leaders moving to take control and change the way that IT personnel work within companies.

Related: Bringing shadow IT into the light: ITaaS and the evolution of the IT department

A worldwide study of 1,003 business and IT leaders showed that 37 per cent of technology budgets are now controlled outside IT departments and 79 per cent of C-level executives think faster and better decisions can be made without involving the IT department.

“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 executive vice president, 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.”

Avanade, the business technology solutions and managed services provider that undertook the study, also reported that a “services broker” model is taking control of how IT works within an organisation. This means that IT staff work with all departments across a business to work out the technology needs and objectives, and lets them source internal or external services or partners to meet the demands.

It is a situation that has led to 35 per cent of IT departments working almost exclusively as services brokers and Avanade’s data shows that 58 per cent of companies will expand the remit of IT services brokers in the next 12 months.

The research also reports that 68 per cent of companies think that the IT department is contributing more to meeting business objectives than the same department did three years ago and IT departments have developed a more “employee-centric culture” than ever before.

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Avanade talked to 1.003 C-level executives, business unit leaders and IT decision makers in 19 countries in February 2014 to get to the results.