Getting a grip on I&O spending to free up resources for new projects and business technology (BT) innovations has been a recurring theme here and in the industry in general. Increased urgency to make this happen is apparently upon us, and it will be moving smartly forward with the active participation of CIOs or without them.
The reason is because customers say so. Using technology is how they discover, evaluate, compare and decide upon what they want to buy and from whom, as well as whether they choose to remain customers. A shift is underway in the makeup of IT and BT spending. Connecting with these customers is driving a steady rise in BT over the next two to three years. Growing BT while purposefully maintaining IT is the balancing act for organizations that want to win, service and retain customers throughout the customer lifecycle.
Forrester Research, Inc. discusses the development of Business Technology agendas, and how it targets customer-focused and customer-supporting technologies. In a recent report comparing spending and product trends in BT and IT through 2017, the analyst & consulting firm finds that BT spending is growing twice as fast as IT spending, rising to 31 percent of all US technology spending by business and government; it will soon represent over half of all new-project spending. “CIOs and their business counterparts will spend more and more of their time and money on their BT agenda, leading to further innovation in this sector over the coming years,” writes Analyst Andrew Bartels.(1)
This report, along with numerous others, serves to remind us that as far as we’ve come we still have far to go.
The rapid rise of, and undeniable reliance on business technology to drive and sustain customer relationships should come as no surprise to CIOs. Its foretelling goes back many years, along with debate about the CIO’s evolving organizational role and whether the CIO title should be changed to reflect new and emerging business responsibilities.
What is surprising is that IT leadership in many companies still seem to be blindsided. They do not see that it’s their companies’ technology-obsessed customers and prospects that are driving this business transformation. If they do see it, then its importance has been eclipsed by operational responsibilities, cost control and improved efficiencies, thus leaving other business leaders to pick up the baton and run with it. That’s not only sales and marketing; it’s all areas of the company and related ecosystem partners that have even a smidgen of customer-facing, customer-touching interaction with the marketplace.
The shift in BT/IT investment balance makes it all the more critical for CIOs to establish their leadership presence and strategic involvement. Their companies’ success depends on it, in that the acquisition of BT solutions in other company departments can have a deleterious impact on the enterprise if they’re not managed holistically and implemented according to IT best practices. At the same time, the purchasers must realize that optimizing their BT solutions’ impact on the business won’t happen in isolation.
It’s likely that non-IT managers know what BT products and services they need to drive the part of the business for which they’re responsible. If they don’t, however, that’s a chance for CIOs to inject themselves into the BT strategy and technology selection process. Regardless, BT without IT is a non-starter.
Integrating these new technologies and applications into existing hardware and application environments, with the attendant security, reliability and performance, is just as important at the BT solution itself. So is the lifecycle management and maintenance of these products, which will overwhelmingly be software that may need modification to run at peak performance within the infrastructure; they’ll certainly need patching, updating, monitoring and troubleshooting, which are skills not typically found outside of IT. In other words, BT solutions come with infrastructure and operations cost of their own, which must be controlled over the lifespan of the solution.
Running BT outside of the corporate datacenter, with a SaaS or IaaS provider for example, can relieve some but not all of these concerns. Scattered, disparate solutions will add complexity now and incompatibilities later with future BT/IT investments and infrastructure models, such as hybrid cloud.
Established mid-market companies are likely to find these developments more challenging than larger enterprises. They typically spend approximately 10 percent more for I&O – upwards of 80 percent of their total IT budget – which can leave them particularly hard-pressed to adopt and fund aggressive BT agendas aligned with tech-savvy customers. Failing to do so, however, really isn’t an option, which makes it all the more important for business operations and IT operations to get on the same page.
(1) Forrester Research Inc., “Sizing The US CIO’s Business Technology Agenda,” by Andrew Bartels, October 14, 2014