What decentralized IT spending means for budget and oversight

What decentralized IT spending means for budget and oversight

Putting purchasing decisions in the hands of business units takes away oversight, leading to possible overspending when those units buy more than necessary.

IT spending plays an outsized role in operating budgets — and it’s going up. IT spending was projected to grow 0.6% to $3.74 trillion in 2019, according to Gartner.

As technology has become pervasive across business units who controls IT spend — and where spend comes from in corporate budgets — is changing.

For 67% of IT leaders, at least half of their spend is controlled by individual business units, according to a survey conducted by Snow Software and IDC Connect.

That’s not necessarily a bad thing, Sanjay Castelino, chief product officer at Snow Software, told CIO Dive. This move puts spending power in the hands of end users (i.e. employees) who buy exactly what they want to be productive.

But putting purchasing decisions in the hands of business units takes away oversight, leading to possible overspending when those individual units buy more than necessary (or duplicate what another department has). It also raises concerns about compliance and safety issues.

“Ten years ago, people used to talk about ‘shadow IT’ and they used to talk about this stuff with very negative connotations,” said Castelino. Now that shadow IT has come into the light, it’s allowing workers to be more agile, but introduces overarching concerns and consequences along the way.

Business buy what they need

While business units are controlling more of IT spend, 78% of respondents think decentralized technology spending is good for business, according to Snow Software and IDC Connect

The report also found 45% of IT leaders think this shift will allow organizations to become more agile and innovative.

When a business unit makes purchase decisions, employees are buying what works for them, said Castelino. Employees can do it quickly, too.

To find out more go to: https://www.ciodive.com/news/it-spending-budget-oversight/569569/