Chris J Powell

The Changing World of IT Spending

I woke up this morning to find a shining ray of hope in my personal inbox from the folks at TEC (Technology Evaluation Center).  As many of my clients do, I get bombarded with content and information about every darn initiative imaginable and I try to read as much of what comes into my inbox (and my mailbox too for that matter) but there is still only 24 hours in the day.  A big question that I get from my clients is about the trends and next pitfalls that I see and that my company see’s coming down the pipeline.  The Blog Post from Josh Chalifour both caught my attention and had me thinking about the trends that I see coming that this article really brought to the forefront.

I have seen for some time the growing change in who IT Directors, Managers and even CIO’s report to and this growing trend is towards direct reporting and inclusion within the Finance Department.  Companies that did not have a formal budget are now being asked to provide one that meets the requirements of reporting to a CFO who has years of budgeting experience.  In the article Josh cites a recent Gartner analysis of the changing role of the CIO and their connection to the CFO and how in even the largest of IT organizations, IT spending must now meet full financial approval from the CFO before moving forward.

 

This move coincides with a requirement to make IT much more tactical and a push towards cloud based technologies is coming headlong whether IT Leaders are ready or not.  The scalabilty and lack of a Capital Expenditure to rapidly grow to market demands means that the cloud is not only here to stay but is forcing many in IT to focus on further reductions in their Infrastructure Teams.  In the past 2 days I have had this exact conversation iwth 4 of my clients and 5 of my prospective clients because they are not really fearful of their job but afraid of becoming marginalized to the point where IT has little or no relevancy to the business.

 

One thing that the Article from Josh did not touch on is the growing connection between IT and HR that I am also starting to see a growing trend with.  Is the line again being blurred not this time between technology and the business but Human Capital vs Technology Trends?  Or is this just a natural part of the documentation and governance process that nearly every company has been forced to move to and the need for stronger and targeted IT Policies and their enforcement?

 

The most interesting part of the article though were the two graphs that outline the connection to IT Spending:

 

Now this trend is in part to poor leadership and the public flogging that has occurred recently with some big Enterprise Project Failures.  This focus is not necessarily a bad thing for IT Leaders either though.  The alignment between the strategic vision of the business and the tactical implementation of technology by IT is coming to a head, but are you able to get ahead of this need, this trend and be prepared for the new conversations about money that have never really come up?

 

Building business cases for technology is never an easy thing.  The focus on the nebulous TCO and ROI can be a challenge at the best of times but whether you are looking at a relatively small purchase or a game changing investment in an Enterprise Application (ie ERP, BI or CRM) well then…your ducks had better be sorted into a nice orderly row.  I work with my clients every day as an Account Manager with a leading IT Research Firm to find the way to have a seat in the board room.  To find that best case scenario to filter out the hype from vendors and get the Right Size Project Plan in place that maximizes the Return on Investment!

 

Now the article that I used for inspiration for this post did pose two question ast the end and I would like to echo them here:

 

Do you find that IT’s role is shifting, as many industry analysts claim?

 

How does your IT organization communicate requirements to those responsible for authorizing purchases?

 

I would love to here from you about these two questions.  Leave a comment or reach out directly to me at krispy at london dot com or better yet, call me at my office +1 519 432 3550 ext 2738.  I am available there daily from 7:30 AM to 5:00 PM Eastern Time.

 

Cheers and have a great day!

 

Chris J Powell

 

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