CIOs Routinely By-Passed by Line of Business Are Transforming To Become Internal Service Providers to Meet Line of Business Demands
Singapore, 11th November 2015: Close to half (41%) of CIOs in Asia and about a third (31%) globally are routinely side-lined when it comes to making IT purchasing decisions, but a growing number (30% in Asia and 42% globally) are now actively embracing a new service provider model in an attempt to stay relevant to line of business colleagues, based on figures from the third annual CIO survey from Logicalis, an international IT solutions and managed services provider (www.logicalis.com).
The 2015 Global CIO Survey polled more than 400 CIOs worldwide and found IT leaders under growing pressure from Shadow IT.
The phenomenon of Shadow IT, when line of business executives by-pass the IT department and CIO in making IT investments, is now a reality for the vast majority – 91% of CIOs in Asia (90% globally) find themselves by-passed by line of business at least sometimes.
With CIOs gradually losing the battle to retain the balance of power in IT decision-making, the survey found that today, about two-thirds (68%) of CIOs in Asia (and 66% of CIOs globally) hold the balance of power over spending – making more than 50% of purchase decisions.
This shows that the threat from line of business driven IT choices is forcing CIOs to re-align their IT strategy to better serve the needs of their line of business colleagues, and transforming IT to become the first choice for all IT service provision.
Mark Rogers, CEO at Logicalis Group said: “These results suggest CIOs are at a tipping point. They are just about maintaining overall control of IT spend, but with the democratisation of IT through technology consumerisation, ubiquitous mobility, growth in the cloud and business transformational technologies such as analytics, line of business colleagues’ power in decision-making is only going to present increasingly tough challenges for the CIO and the wider business executive.
“Unchecked and often unseen by IT, this has serious implications for IT governance and security, especially from solutions designed to directly fire the imagination of line of business executives to the possibilities that technology could have on their business. ”
IT Transformation is Underway
The Logicalis survey suggests that IT leaders are seeking to retake control of IT – not by eliminating Shadow IT but by embracing it.
CIOs are seeking to transform IT departments into internal service providers – lean organisations managing service portfolios, not technology, and able to respond quickly to line of business demand.
It seems that transformation is taking shape. CIOs are freeing themselves from the day-to-day operational tasks. CIOs in Asia lead with 50% of respondents, compared to 38% globally, spending at least 50% of their time on strategic activities.
Tellingly, CIOs worldwide are now spending almost half of their time (40% in Asia and 42% globally) on activities consistent with developing and delivering the internal service provider model – ‘engaging with line of business’ and ‘scoping and provisioning new IT services’.
An increased focus on service provision is also reflected in CIOs’ responses around the balance of IT department activities, which suggest a 50:50 balance between technology management and the delivery of a portfolio of services. Indeed, around half of the CIOs (47%), both in Asia and globally, report that at least 30% of their IT is provided by external service providers.
James Tay, CEO of Logicalis Asia, said: “This signals a big change for the CIO and the IT Department. CIOs and IT directors in the region are less encumbered by legacy infrastructure and are beginning to respond to the challenges more quickly and reshape their IT functions to better reflect their business needs.
“With line of business executives having more influence over IT purchases, we could see more crossover job functions and roles as technology integrates with both marketing and finance. This integration of both technology with marketing, and/or technology with finance, could see the staff in these departments become jointly responsible for the outcomes.”
Mark Rogers concluded: “At Logicalis, our response to these trends is simple. We have to be the CIOs’ strategic advisor and provider of services and solutions that keep them not just relevant to their businesses, but able to support the innovation their line of business colleagues need, in a digitally accelerating global economy.”