by Julian Goldsmith

KPMG: Recession hastening marketing, sales go-it-alone IT policies

Aug 28, 20122 mins
IT LeadershipIT Strategy

The economic climate could be hastening the rise in non-tech managers procuring their own IT, undermining the power of the CIO, according to a KPMG researcher.

Research from the management consultancy suggests that global IT spend is expected reach $2.7tr by the end of 2012, a rise of 3.9 per cent.

Growth in spending on computer hardware, enterprise software, IT services and telecoms equipment was in line with the general trend, but far below growth recorded in the previous twelve months, at 6.9 per cent. This suggests corporates are putting the brakes on spend in infrastructure, the CIO heartland.

Mac Scott, associate director at KPMG’s advisory team believes this could be one of the causes for business departments going their own ways in IT procurement.

He told CIO UK: “Traditional IT projects in large organisations are viewed as very costly. Infrastructure investments are thought of as prohibitively high. The IT requirements for supporting growth in new markets is more flexible, with a low cost of implementation. Departments, like marketing and sales, which can’t afford to make procurement decisions at the pace needed for large infrastructure investments are voting with their credit cards.”

Scott pointed to the rise of the Chief Digital Officer in some US organisations, a role that does not site within the IT department, as a sign that IT spending is moving away from the control of the CIO.

He observed that marketing and sales departments are not traditionally seen as cost centres by the board, but as the engines for business growth. As a consequence they have access to lines of capital that other departments don’t get. Increasingly, says Scott, this capital is being spent on guerrilla IT projects.

Scott said: “Just like in crime thrillers, sales and marketing have method, motive and opportunity.”

Scott told CIO UK that the trend for non-tech departments investing in their own IT is growing ,but still small scale at the moment and impacting only small fractions of the overall IT budget.