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Disruptive Trends in IT Spending

Few lines of business have been disrupted more in recent years than IT. Think of all the technological revolutions that have taken place—mobility, cloud computing, social technologies, SaaS—and realize that it has been IT’s (often thankless) job to research, deploy and integrate these technologies into the workplace.

And the disruption continues. IT has always been a cost center, and CIOs are charged with lowering these costs while meeting increasingly complex technology needs across all departments. Trends like the virtualization of servers and an increasing reliance on software defined networks to replace firewalls and routers within company data centers are all ways that CIOs are chasing spend.

But as IT spending continues to drop, overall technology spending is moving and will continue to move beyond the bounds of the IT budget and into other lines of business. According to Forrester Research, business buyers are 20% more likely to increase their spending on technology in comparison with IT decision-makers (Forrester Research, Inc., Tracking The Renegade Technology Buyer, May 2013).

So where are the technology dollars going, and why are they leaving the IT department?

IT no longer has a monopoly on technology
Technology isn’t so mysterious anymore. Leaders at all levels and across all departments are increasingly tech-savvy, and they’re bringing that knowledge to bear in their lines of business. The SaaS model has revolutionized productivity within departments. As long as they’ve got power, internet, and bandwidth, they can deploy and manage their own cloud applications without going through IT.

And quite frankly, IT doesn’t necessarily have the skills required to properly marry the people and technology within departmental specializations like Sales or Operations. Sales leadership, on the other hand, has the background and experience to know what their people need and how best to deploy software solutions to empower productivity.

The numbers don’t lie: sales and marketing departments are where the revenue is generated, and technology spending is following the revenue dollars. By 2017, analyst firm Gartner has predicted that the Chief Marketing Officer will spend more on IT than the CIO.

So Where Does this Leave IT?
IT professionals are no strangers to challenge and change. Some CIOs are embracing a new business-focused role, as 25% of so-called “Digital CIOs” are working closely with top management to drive business innovation and develop business strategies. However, this problem won’t be solved overnight. Personally, I believe one approach for IT to take is to function as an extension of Facilities, focusing on reducing costs and improving efficiencies in networks, power, storage and bandwidth. But that’s only one possibility.

What are you seeing in your organizations? How is IT facing the challenges of budget reduction and increased technological breadth and complexity? Share your thoughts: find me on Twitter or leave comments below.

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