Monday, 09 November 2015 11:29

CIOs respond to Shadow IT challenge: report

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CIOs appear to have been through a tough period where they were increasingly marginalised from IT purchasing decision making in their businesses, according to a new survey which reveals that line of business executives had been bypassing their IT departments and CIOs when making IT investments.

But, despite previous marginalisation, those CIOs and IT leaders are now fighting back and getting back in the game when it comes to IT investment decision-making.

According to a global survey of 420 CIOs (60 in Australia) by IT solutions and managed services provider, Logicalis, the phenomenon of Shadow IT is now a ‘new reality’ for the vast majority of CIOs as they come under growing pressure from having been left out of the decision-making loop.

The survey found that 90% of CIOs worldwide had found themselves by-passed by line of business “at least sometimes”.

Logicalis Australia CEO, Basil Reilly says that “Clearly, CIOs are gradually losing the battle to retain the balance of power in IT decision-making.”

But all is not lost for CIOs and IT leaders, with the survey finding that CIOs are now 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.

“Many are forced 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 those leaders are seeking to retake control of IT – not by eliminating Shadow IT but by embracing it,” says Reilly.

According to Reilly, transformation is already taking shape, with CIOs now freeing themselves from the day-to-day operational tasks, and with 38% now spending at least 50% of their time on strategic activities.  

The survey found that two thirds (66%) of CIOs now hold the balance of power over spending – making more than 50% of purchase decisions.

In line with changing environment, CIOs worldwide are now spending almost half of their time (42%) on developing and delivering the internal service provider model and, as Logicalis puts it – ‘engaging with line of business and scoping and provisioning new IT services’.

According to the survey, an increased focus on service provision is also reflected in CIOs’ responses around the balance of IT department activities, which a Logicalis says suggests a 50:50 balance between technology management and the delivery of a portfolio of services - around half of CIOs (47%) report that at least 30% of their IT is provided by external service providers.

“It is clear that CIOs are seeking to regain control by establishing ‘internal service providers’ capable of delivering the choice of services their organisation needs – whether those services are built and operated internally,  sourced from managed service partners or are consumed from the cloud,” says Riley.

“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.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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