Before the days of cloud and the ready availability of SaaS, line of business managers relied on IT for most of the software and services they needed to do their jobs. Fast forward 15 years and a lot has changed.
Most line of business leaders today drive department-level buying decisions, choosing the vendor and the software. At a minimum, they put together the short list of vendors and technology they'd like to work with.
"In my company, the executive team discusses technology as a whole and not in silos," said Danielle Ruess, CMO of the technology consulting firm Wizeline. "This is critical to ensure we can move faster as an organization, and that we can create as much standardization as possible while protecting our systems and data."
Most leaders still involve IT in the process for sign-off on cybersecurity, data privacy or regulatory issues, though rogue IT is still a major issue. When it comes to enterprise-level purchasing, whether for a new ERP or CRM, IT will have a say — at some point.
"There are formal processes in place for any sort of spending above a certain point," said Ian Campbell, CEO of Nucleus Research. "Ultimately, the head of sales decides what CRM system they're going to use. But should the CIO be part of it? Yes. Are they? I would say in half the deals, the CIO was brought in after the decision was made."
The struggle of large enterprises
In what might seem counterintuitive, it can be hard to institute companywide processes at larger organizations where cross-departmental standardization of technology is a sought-after goal, said Ari Lightman, professor of digital media and marketing at Carnegie Mellon University's Heinz College.
"In larger organizations, you have systems built on other systems, there's layers and layers and layers," he said. "You have this … rat's nest of issues and processes leading into other processes. To decouple a process is really, really challenging, because of all the interconnections. How does removing this process impact this process over here?"
The sweet spot is in organizations between 250 and 70,000 employees, Campbell said. Below 250 employees, decision making is more ad-hoc, aided by personal relationships and the ability to talk directly to peers. Beyond a workforce of 70,000, the organization struggles to break down silos due to technical and process debt.
"There is a point above which you don't have one company anymore," Campbell said. "What you have are multiple companies making decisions based on what they need."
A marketing department at a large telecom company could choose different technology, selecting a system separate from a primary CRM.
Ken Wilson, co-founder and experience chair at consulting firm Bright Horse, said businesses usually follow a three-step process when buying new tech:
- Shortlisting: This is where the buyer finds a handful of vendors on Google, does some additional research, and presents the results to their IT team.
- Culling: The second step is whittling down a list to one or two finalists based on price and how well the solutions fit their needs.
- Decision making: The final step is negotiating the price and signing the contract.
Best IT practices
CIOs trying to reign in rogue IT can follow few best practices.
Know your customer, said Lightman. In large organizations, a CIO must handle many different personality types, roles, expectations, stress levels and other factors that influence an individual's or group's ability to adhere to new rules or adopt new platforms and technologies.
Companies do these kinds of ethnographic studies on their customers all the time. Lightman's suggestion is to turn these methods inward to understand employees better.
"We have to understand that everybody's under a certain level of stress," he said. "The pandemic has just taken that up to the Nth degree. And when people are under stress, they do things in an irrational manner. So, you might design … a technology rollout that just goes south very quickly because you haven't taken into consideration behavioral economics and people's irrational behavior."
The other best practice is more straightforward: To improve adoption, start slow. Do proofs of concept and pilot projects with groups or departments within the company. Only scale the solution once the kinks are worked out.
IT's role will diminish
As cloud continues to supplant on-premise applications, the traditional role of the IT organization as an arbitrator of technology will diminish, said Campbell.
Outside consultants, systems integrations and technology providers can supplant IT, buoyed by knowledge of integration challenges and the privacy and regulatory implications of their technologies.
IT will continue to provision new employees with technology, keep local area networks up and running, help decision makers compare vendors' offerings, and be on the lookout for new technologies that could benefit their organizations.
"It's very much an advocate-consulting role," Campbell said. "I see the important role as being the person who's looking at new technologies that might be interesting. As an HR person, you're an HR person, you're not a technologist. You don't necessarily know what you can do with IoT."