CIOs Routinely By-Passed by Line of Business Are Transforming To Become Internal Service Providers to Meet Line of Business Demands

According to the third annual CIO survey from Logicalis, an international IT solutions and managed services provider (www.logicalis.com), almost one third (31%) of CIOs globally are routinely side-lined when it comes to making IT purchasing decisions, but a growing number (42%) are now actively embracing a new internal service provider model in an attempt to stay relevant to line of business colleagues.

The 2015 Global CIO Survey polled more than 400 CIOs worldwide and found IT leaders under growing pressure from Shadow IT.

The phenomenon of Shadow IT, when line of business executives by-pass the IT department and CIO in making IT investments, is now a reality for the vast majority – 90% of CIOs worldwide find themselves by-passed by line of business at least sometimes.

With CIOs gradually losing the battle to retain the balance of power in IT decision-making, the survey found that today, two thirds (66%) of CIOs hold the balance of power over spending – making more than 50% of purchase decisions.  This shows that the threat from line of business driven IT choices is forcing CIOs 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 provision.

Mark Rogers, CEO at Logicalis Group said: “These results suggest CIOs are at a tipping point.  They are just about maintaining overall control of IT spend, but with the democratisation of IT through technology consumerisation, ubiquitous mobility, growth in the cloud and business transformational technologies such as analytics, line of business colleagues’ power in decision-making is only going to present increasingly tough challenges for the CIO and the wider business executive.

“Unchecked and often unseen by IT, this has serious implications for IT governance and security,  especially from solutions designed to directly fire the imagination of line of business executives to the possibilities that technology could have on their business. ”

IT Transformation is Underway

The Logicalis survey suggests that IT leaders are seeking to retake control of IT – not by eliminating Shadow IT but by embracing it.

CIOs are 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.

It seems that transformation is taking shape.  CIOs are freeing themselves from the day-to-day operational tasks, with 38% now spending at least 50% of their time on strategic activities.

Tellingly, CIOs worldwide are now spending almost half of their time (42%) on activities consistent with developing and delivering the internal service provider model – ‘engaging with line of business’ and ‘scoping and provisioning new IT services’.

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

Mark Rogers, concluded: “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.

“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.”