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April 17, 2014

Why losing control over IT spend is a good thing for CIOs

CIOs become consultants for their new boss – the CEO.

By Joe Curtis

CIOs are losing control over how and where IT budgets are spent – but that’s a good thing, according to CA Technologies.

The business is reallocating two-thirds of IT spend to drive innovation through new products and services rather than application maintenance, the traditional drain on finances, according to a CA Tech survey of 1,300 IT leaders across the globe.

It found that 45% of spending decisions concerning IT budgets are made outside of the CIO’s office in the UK, as automated application management tools are replacing the need for an overwhelming spend on simply maintaining equipment and services.

Martin Ashall, CTO for CA Technologies UK and Ireland, told CBR: "That’s a massive shift we’ve seen over the last few years, before which it was very much focused on ‘keeping the lights on’.

"Businesses are a lot more demanding now of IT. They’re asking IT to step up and help innovation more."

But while IT is losing autonomy, CIOs are becoming more influential, with 89% reporting straight to the CEO in the UK, 24% higher than the rest of Europe, according to the survey, carried out by Vanson Bourne.

"CIOs have made massive strategic progress in the business since 2011," said Ashall. "The CIO is really evolving from that traditional support role of being the ‘go to’ for IT complaints to becoming much more a business consultant or a strategic business partner."

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This means the CIO has a new boss now – the chief executive, added Ashall. Just three years ago, only 36% reported straight to the CEO, but last year 71% said they do just that.

However, just 25% of CIOs surveyed claimed IT is fundamental to their business’s success, compared to 41% of non-CIOs, while just 7% of CIOs said IT’s role is to drive innovation.

CA Technologies believes this "lack of confidence" could prevent IT from capitalising on new opportunities, and Ashall suggested CIOs should focus on measuring the value IT brings to their company.

"CIOs really need to demonstrate the impact IT is having on the business to help the business understand the value they’re getting from IT," he said. "Only 17% of respondents look at the impact of the value they’re delivering."

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