LOB executives taking IT charge in the cloud era

Posted by Mike Vizard on Jun 9, 2014 10:12:00 AM

Cloud computing added fuel to a shadow IT spending problem that has been an issue most organizations have been grappling with for years.take_my_money_crop

But now that line of business executives have been buying cloud application services without any direct intervention from IT for years, they now have more confidence in their own choices.

In fact, cloud applications aimed at sales people has become a multibillion market and marketing executives are expected to spend more on IT than the CIO by 2017.

The end result is that from the perspective of the IT services organization figuring out who is in charge of what budget within the organization has never been more challenging.

A recent survey of over 1,000 business and IT leaders conducted by the IT services firm Avanade underscores the point. The survey found that 37 percent of technology spending is happening outside of the IT department. More interestingly, 79 percent of C-level executives believe they can make better and faster decisions without the involvement of IT.

Avanade CIO Chris Miller says the most interesting thing about that is we’re starting to see the emergence of two tiers of IT. One is the traditional systems or records managed by internal IT. The other is systems of engagement managed more directly by the lines of business.

Another survey of 1,115 CIOs conducted by Capgemini found that one-quarter of them had no effective control over their application environment.

10 channel experts  talk shadow IT and  more. Read our  Tweet Chat recap! While always an issue, shadow IT spending by LOB executives really took off with Salesforce.com. Now there are hundreds of applications in the cloud specifically aimed at sales people.

ToutApp, for example, provides an email tracking and analytics service that allows salespeople to see what email messages have been read and, more importantly, were effective. ToutApp CEO Tawheed Kader says inside sales alones represents an almost $13 billion market opportunity.

ClearSlide, meanwhile, provides a sales engagement platform that is delivered as a service. ClearSlide CEO Al Lieb says the primary benefit of ClearSlide is that it keeps track of what slides customers keep coming back to after the salesperson has left the prospective client.

In terms of corporate influence it’s hard to say who is spending more in the cloud. There’s certainly more sales people than marketing people in an organization. But in terms of overall spending the marketing people may actually be consuming a lot more storage and bandwidth.

All this leaves the average IT services organization in a bit of a quandary. IT services organizations have been tip toeing around CIOs for years. But they never knew when the CIO is going to take exception. The savvy IT services organization often finds it prudent to at the very least keep the CIO in the proverbial loop.

How long this situation will persist is anybody’s guess. On the one hand, some argue that a new generation of business executives are IT savvier than ever. Conversely, there are those that maintain that business executives will soon tire of focusing on IT issues that at the end of the day are not core to their primary mission.

But given the fact that there is no business process today that doesn’t involve IT to one degree or another chances are the IT influence of the LOB executive is only going to continue to expand in the years ahead.

Topics: Customer Management

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