CIOs blind to 40% ‘shadow’ IT spending at their firms

IT can't ban spending by other business functions, but need to regain control too

IT departments are “significantly underestimating” the budgets allocated to technology in others parts of the organisation, as more business leaders bypass the CIO and IT staff to execute their own projects, according to research.

CIOs globally estimate that the “shadow” IT spend in other areas of the business represents another 20% on top of the official IT budget. However, the real figure is closer to 40%, according to the latest findings from member-based advisory firm CEB, which surveyed 165 organisations representing more than €34.8 billion in IT spending.

CEB said business leaders are keen to test out technologies for themselves, whether that be cloud services, CRM applications, document sharing tools or even just giving out iPads to their teams to increase productivity.

 

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“IT departments need to look at how they can support these business-led efforts and provide the flexibility that employees and business leaders need, while managing them in a way that is both secure and cost-efficient for the business,” said CEB.

The marketing, HR, operations and finance functions are most likely to dedicate their own budgets to technology, CEB found. For example, six percent to nine percent of the overall HR budget is now dedicated to IT, as businesses exploit the growing number of cloud-based HR systems and look to talent analytics to better understand both existing staff and new recruits.

Andrew Horne, managing director at CEB, said: “While the idea of ‘shadow spending’ has in the past been seen as a risk or threat, on the contrary it is often a sign of healthy innovation and presents a valuable opportunity for IT to work more closely with business partners to develop new capabilities.”

Horne said: “Failing to recognise the extent to which tech-driven projects are happening outside of the IT department can be a real worry, yet trying to maintain total control is equally a step in the wrong direction.

“By getting this balance right, CIOs can help the business to be more flexible, identify potential cost savings and ultimately implement change and innovation more easily.”

The study also found that total IT budgets for the year ahead are set to increase by three percent, driven almost entirely by rises in operating expenditure, while capital expenditure remains flat at 0.3%.

Spending on mobile applications is set to accelerate in 2014 though, with almost two-thirds (65%) of employees dissatisfied with the mobile capabilities available to them for work purposes.

The number of CIOs dedicating over four percent of their budgets to this area has more than tripled from 2012, due to the growing focus on flexible working.

 

ComputerworldUK.com

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placeholder: '+44 0000 000000', helpText: 'Include the JE country code +44 before the phone number', }, { countryCode: 'IM', placeholder: '+44 0000 000000', helpText: 'Include the IM country code +44 before the phone number', }, { countryCode: 'GG', placeholder: '+44 0000 000000', helpText: 'Include the GG country code +44 before the phone number', }, { countryCode: 'AL', placeholder: '+355 00 000 0000', helpText: 'Përfshini kodin e vendit AL +355 para numrit të telefonit', }, { countryCode: 'SM', placeholder: '+378 0000 000000', helpText: 'Includere il prefisso internazionale SM +378 prima del numero di telefono', }, { countryCode: 'FO', placeholder: '+298 000000', helpText: 'Inkluder FO landekode +298 før telefonnummeret', }, { countryCode: 'MT', placeholder: '+356 0000 0000', helpText: 'Include the MT country code +356 before the phone number', }, { countryCode: 'LI', placeholder: '+423 000 0000', helpText: 'Fügen Sie vor der Telefonnummer die LI-Ländervorwahl +423 ein', }, { countryCode: 'GI', placeholder: '+350 000 00000', helpText: 'Include the GI country code +350 before the phone number', }, { countryCode: 'MD', placeholder: '+373 00 000 000', helpText: 'Includeți codul de țară MD +373 înaintea numărului de telefon', }, { countryCode: 'HU', placeholder: '+36 00 000 0000', helpText: 'A telefonszám előtt adja meg a HU országkódot +36', }, { countryCode: 'NZ', placeholder: '+64 00 000 0000', helpText: 'Include the NZ country code +64 before the phone number', }, { countryCode: 'ME', placeholder: '+382 00 000 000', helpText: 'Uključite ME pozivni broj države +382 prije telefonskog broja', }, ]; if (!countryCode || typeof countryCode !== 'string') { return mockPlaceholders[0].helpText; } const selectedHelpText = mockPlaceholders.find(function(item) { return item && item.countryCode === countryCode; }); return selectedHelpText ? selectedHelpText.helpText : mockPlaceholders[0].helpText; } function setDefaultHelpText(countryCode) { const helpTextSpan = 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: false; var shouldAppendCountryCode = smsNotRequiredRemoveCountryCodeEnabled ? isRequired : true; var phoneInput = document.querySelector('#mce-' + fieldName); if (phoneInput && defaultProgram.countryCallingCode && shouldAppendCountryCode) { phoneInput.value = defaultProgram.countryCallingCode; } displayFlag?.addEventListener('click', function(e) { dropdown.focus(); }); dropdown?.addEventListener('change', function() { const selectedCountry = this.value; if (!selectedCountry || typeof selectedCountry !== 'string') { return; } const flagSpan = displayFlag?.querySelector('#flag-emoji-' + fieldName); if (flagSpan) { flagSpan.textContent = getCountryUnicodeFlag(selectedCountry); flagSpan.setAttribute('aria-label', sanitizeHtml(selectedCountry) + ' flag'); } const selectedProgram = window.MC?.smsPhoneData?.programs.find(function(program) { return program && program.countryCode === selectedCountry; }); var smsNotRequiredRemoveCountryCodeEnabled = true; var smsField = Object.values({"EMAIL":{"name":"EMAIL","label":"Email Address","helper_text":"","type":"email","required":true,"audience_field_name":"Email Address","merge_id":0,"help_text_enabled":false,"enabled":true,"order":0,"field_type":"merge"},"FNAME":{"name":"FNAME","label":"First Name","helper_text":"","type":"text","required":false,"audience_field_name":"First Name","enabled":false,"order":null,"field_type":"merge","merge_id":1},"MMERGE2":{"name":"MMERGE2","label":"Second Name","helper_text":"","type":"text","required":false,"audience_field_name":"Second Name","enabled":false,"order":null,"field_type":"merge","merge_id":2},"MMERGE3":{"name":"MMERGE3","label":"Company Name","helper_text":"","type":"text","required":false,"audience_field_name":"Company Name","enabled":false,"order":null,"field_type":"merge","merge_id":3},"MMERGE4":{"name":"MMERGE4","label":"Job Title","helper_text":"","type":"text","required":false,"audience_field_name":"Job 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fieldName); updateCountryCodeInstruction(selectedCountry, fieldName); }); } document.addEventListener('DOMContentLoaded', function() { const smsPhoneFields = document.querySelectorAll('[id^="country-select-"]'); smsPhoneFields.forEach(function(dropdown) { const fieldName = dropdown?.id.replace('country-select-', ''); initializeSmsPhoneDropdown(fieldName); }); });

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