IT Quickly Losing Control Of Enterprise Tech Spending, Study Says

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The funding for enterprise technology projects is increasingly falling out of the hands of IT and shifting toward the functional end of business, according to a recent study.

An IDC study released Thursday found that 61 percent of enterprise technology projects are funded by functional business and credits the shift to the trend toward technology saturation and consumerization, an increased urgency in the need for technology to compete in business and the advent of cloud computing.

"Technology has long been central to improving business processes, enabling greater speed, efficiency, and reliability," said Meredith Whalen, IDC senior vice president, in a presentation about the study. "As businesses embrace the 3rd Platform, built on cloud services, big data analytics, mobile computing, and social networking technologies, they are taking the critical first steps toward business process transformation and, in some cases, business model transformation. With such high stakes, the business is increasingly taking a front seat in technology initiatives."


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Among business executives surveyed, 85 percent said IT is becoming more valuable to the functional side of business, but the IDC study said that it is important for IT organizations to jump on board with that and make sure not to miss the boat.

The leading area of growth in the functional end of business IT spending was in the marketing department, which showed a CAGR of 9 percent over five years.

Kevin Miller, CMO at SalesFUSION, said that his marketing automation software company has seen a jump in IT spending by companies' marketing sectors to keep pace with social selling and Internet marketing. Sales people often feel overwhelmed and that they have lost control of the cycle, he said, which can be regained through technology.

However, that doesn't mean IT is completely out of the conversation, Miller said. In the last 12 to 18 months, he has seen an increase in having to approve new software systems with the IT department or CRM administrator of a company before the sale can be completed.

"Sooner or later, they will be making the decision," Miller said.

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