point tipping

New Gartner research shows that the tipping point is tech decentralization out of IT

In a tipping point for IT organizations and CIOs, more technology workers are being hired by business units than are being hired by IT departments, according to new research from Gartner. This shift will have major ramifications for IT budgets, the influence of CIOs, and the roles of IT leaders as organizations head into a…

More technology workers are being employed by business units than IT departments.

This shift will have significant ramifications on IT budgets and the influence of CIOs and the roles IT leaders play as organizations move into a future in which technology underpins the organization’s infrastructure and so many entry-level workers in every department start their first job with significant technology skills.

“CIOs cannot afford to have the entire organizational technology estate,” states Darren Topham (senior analyst at Gartner). “In fact, it’s dangerous.”

Topham believes that these skills are a key reason for this change. This is in addition to another force that has been in place for some time: the availability of applications that can be purchased, licensed, and used by specific business departments. This was formerly known as shadow IT. This trend is newer, with entry-level workers’ tech skills driving the change.

” This is not only in comp sci and STEM subjects,” Topham states. “This includes the arts and humanities .”

Topham presented the research findings and some recommendations for CIOs in a recent webinar.

Between March and May 2020, Gartner looked at total jobs posted in the top 12 countries ranked by GDP and found that in the data science and data analytics fields, 306,783 pros were recruited by IT departments while 697,140 were recruited by other business units. Gartner observed similar differences in the recruitment numbers of AI pros and robotics process automation pros. IT departments were more likely to recruit these professionals than business units.

Why do business units do this? Are they having a problem with the IT organization’s operation? According to Gartner’s discussions with stakeholders, no.

Business Units Feel Empowered

“Topham states that it’s not because they dislike IT, think IT is too slow, or have bad relationships. It’s because they can. They feel empowered. They feel closer to their clients and more responsive to their needs

The top two reasons business unit leaders claimed they were able to acquire or develop a solution on their own without the support of the IT department are: “We have a better grasp of our needs than the IT department” and “We have all the resources and capabilities necessary to do it ourselves .”

When Topham questioned CIOs last summer about the cost of shadow IT, their estimates ranged from 5% to 66% of total technology spending. Topham also asked business units about their spending. The real number for tech spending outside of the IT organization and IT budgets is more like 36%, or six-times what CIOs thought it was.

But the problem was not limited to the high number. The other piece that could be galling to IT leaders is that that 36% of tech budget is for discretionary projects.

” It’s almost all being spent on growth projects,” Topham told InformationWeek. “Whereas most of the budgets for CIOs are non-discretionary. CIOs don’t get much wiggle room.”

On an average, 70% about half of the formal IT budget is used for normal business activities and investments. Most of these are non-discretionary, according to Gartner.

Another frustrating prospect is that IT organisations are often asked to assume formal management responsibility for these shadow IT projects around once every eight weeks according to Gartner research.

But Gartner doesn’t see a diminishing role for either the CIO or the IT department. Topham says that the CIO will not be a shrinking role for the IT department. In order to

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