Business Leaders Spending On Technology Because It’s Too Important To Let I.T. Go It Alone

In Forrester’s latest report, “Tracking The Renegade Technology Buyer,” we uncover the motivations and technology spending priorities of over 1,000 North American and European business executives. The data from the Forrsights Business Decision-Makers Survey was collected in Q4, 2012.  Of the 891 respondents that had a budget over US$1 million, 824 spent their own money on hardware, software, telecom or services. Twenty-four percent of the 891 spent over 21% of their budget on technology, accounting for over $US 31 billion in expenditures. Senior management and sales and marketing were the top spending business functions and financial services/insurance and telecom/utilities lead the pack from a vertical perspective.

So why are business leaders carving out part of their own budgets for technology? It’s contrary to what you think. The high business spenders are not doing it because it is faster or cheaper than central IT – they are doing it because they see technology as too important to their success not to be involved. In parallel, senior management is more relaxed in dealing with the technology – 33% of the high spenders say there technology IQ has increased and they are more comfortable working with IT. Another 20% say that their use of consumer technology has changed their expectations of how technology should be used. The consumerization of IT is not just about younger Gen Y staff wanting to bring their own Macs and iPhones to the office; just as or more importantly, it’s also changing the way senior managers drive business and technology strategy.

The high spenders are also opening their wallets to fund systems of engagement-focused technologies. They are three times more likely to be hiring their own IT staff than low spenders and 2X more likely to be investing in smartphone apps and analytics.

The implications? CIOs have to pivot and act more as a consultant to the business – the days of a centralized controlled IT world are over just like the centralized state-run economy of the Soviet Union is a thing of the past.  Vendor management can no longer be the central management point for IT suppliers: they have to teach the business those skills. On the vendor side, suppliers will need to raise their business IQ and talk about business metrics and not endless tech-speak.

Comments

more relaxed in dealing with the technology

Great research. I suspect that the shift to on-demand software and browser-based services are fueling this trend. It would be interesting to know the key challenges that marketing and sales executives face. For financial services/insurance, one has to be data (management) related.

Percent of total IT Spend

Great report. Would love to get a ballpark of how large a % of the total IT spend this $41B represents. And does the $41B include personal devices (phones, laptops, mobile phone/data plans) and SaaS and internal staffing costs?