According to pundits a good percentage of IT spending is already out of IT's control and the trend calls for it to keep tipping away.
As we enter budget season, that raises interesting questions about the future of IT spending and, more importantly, questions about corporate IT responsibility and accountability. Regarding the latter, there are many hidden perils that will likely get ugly in the coming years.
In its "Raising Your Digital IQ" survey of 500 large U.S. companies, PwC concludes that 15% to 30% of IT spending already occurs outside the IT consolidated budget (see "Does 'shadow IT' lurk in your company?"). And Gartner says that within three years that number will reach 35%. Ten years ago it was less than 10% (see "The upside of shadow IT").
The culprit driving the change, of course, is cloud computing. It is increasingly easy for line of business (LOB) folks to acquire computing resources and services without going through conventional IT channels (resulting in the rise of so-called shadow IT).
Even when cloud services are openly acquired they can result in budget shifts, as LOB folks stop paying IT for a given service and instead add that as a revolving subscription expense to their own spreadsheets.
While that complicates your budget process, the real threat here is fragmentation of IT responsibility. The threat isn't to IT (although some staffers may view it as such); the threat is to the organization as a whole.
There has been plenty written, after all, about the downsides of cloud computing. If you lose centralized control to piecemeal cloud solutions, you risk everything from virtual server sprawl to exploding bandwidth needs, duplication of effort, impediments to data integration, complicated security and compliance issues, etc., etc., all of which can result in spiraling costs.
The best way to avoid these problems is to keep IT decision-making centralized. That doesn't mean clinging desperately to the way we have always done things. There is no resisting cloud at this point. Better to embrace cloud and help the organization do it right.
The key, IT executives says, is to be proactive and responsive. If LOB folks perceive you as ineffective they will be more inclined to try to work around you. If, on the other hand, you have processes in place to streamline the review of cloud services, you can stay out in front of the demand, which will prove invaluable when it comes to maintaining a centralized view of all things IT (maybe even make it possible to maintain centralized IT budgeting). And that can only help insulate the organization from the downsides of cloud.
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