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CIOs lose control of the enterprise IT budget

A recent report from Forrester Research reveals that chief information officers are losing their grip on enterprise IT budgets with line-of-business managers taking up the slack…

In 2010 74 percent of enterprise IT budgets was spent by CIOs. Last year that had plunged to 58 percent according to a recently released Forrester Research report.

The Asia Pacific CIO Budgets and Priorities in 2013 report notes that, although Asia Pacific IT budgets are in somewhat better shape than those in other parts of the world, there’s not much call for rejoicing. Only 45 percent of survey respondents predicted that IT budgets would increase this year, and even those that were expecting increases felt they would be modest.

According to John Brand, a co-author of the report and Forrester vice principal, the commoditisation of enterprise technology along with the advent of cloud-based infrastructure which was “easily consumed and built for purpose” was also seeing a shift in terms of who controlled the purse strings.

Brand said that chief marketing officers, HR directors and line-of-business managers were often spending part of their budget on technology specific for their business needs. He said that often business people were pushed into going it alone on technology because of procurement practices which made accessing technology through more conventional means too slow.

Two in five survey respondents said that the business was spending more on technology directly because; “technology is too important for the business not to be involved.”

Brand denied that this business-side technology investment meant the enterprise IT budget itself was under threat. Chief marketing officers for example tended to spend money out of their budgets that might otherwise have been spent buying advertisement space. “It’s not that IT’s budget is shrinking, it’s that there is IT spending coming from other areas,” said Brand.

He said that in the future it would he harder to determine what was actual technology spending because “it’s being embedded into a service.” Nevertheless he said that “IT is definitely losing control. I see a lot of concern that business units that buy software-as-a-service can have disaster recovery issues or a security event and suddenly it becomes IT’s job to fix that.”