Gartner released a report showing that IT departments are losing control of IT spending. Industry experts are expecting an increase of 4.1 percent however chief information officers (CIOs) are expecting their budgets to be flat or declining.
So how is IT spending getting out of control?
Simple, studies have shown that over 38 percent of global IT spending is done outside of IT departments. This includes other departments such as your marketing department, HR department, logistics department and sales department. Many of these purchases are with no knowledge of the IT department.
The recent Gartner report estimates that 50 percent of all technology sales professionals are actively selling direct to business units and not IT departments. The impact of all this IT spending is having a massive impact on the global IT industry.
Here are some interesting statistics on how global IT industry is changing:
- Since 2013, over 650 million new physical objects have come online.
- 3D printers has become a billion dollar industry and growing at a tremendous rate.
- Over 10 percent of automobiles are connected and growing at an incredible rate due to advancements.
- The number of chief data officers (CDO) and chief digital officer (CIO) positions has doubled.
How do you control IT spending?
Proper vendor management enables organizations to control costs, drive service excellence and mitigate risks to gain increased value from their vendors throughout the deal life cycle. Many IT consultants suggest that vendor management is the key taking control of your IT spending. CIOs need to create a proper IT spending model which still allow IT departments to remain relevant. IT departments need to be involved in all cycles of purchasing IT spending.
Vendor management enables organizations to develop, manage and control vendor contracts. By managing vendor relationships, you are able to review the efficiency of products and services delivered. This will help obtain business objectives and minimize business disruption.