Digital transformations are not just about technology, they\u2019re also about business change. As technology increasingly permeates every aspect of the enterprise, the lines are blurring, with business unit employees frequently becoming business technologists and purchasing their own software and services.\n\nNearly three-quarters (74%) of technology purchases are funded, at least in part, by business units outside of IT, according to a recent Gartner survey, with 26% of tech investments funded \u2014 and presumably controlled \u2014 entirely by IT. Analytics and AI are increasingly the capabilities for which business technologists are taking the lead.\n\nIndustry observers say IT leaders are generally not opposed to business leaders taking more ownership of tech spending. \u201cIf you speak to the vast majority of CIOs, they\u2019ll say those business transformations need to be led by the business leader with support from IT,\u2019\u2019 notes Len Riley, commercial advisory practice leader at UpperEdge.This is due in part to the fact that pure SaaS vendors frequently sell directly to the business, Riley says. \u201cVendors definitely influenced this.\u201d\n\nAnother factor is that CFOs want expenses associated with a tech platform to reside within a business unit\u2019s profit and loss statement, \u201cwhich inherently increases the power and control for the business,\u201d along with accountability, he says.\n\nBut there isn\u2019t always support or guidance from IT. When tech spending is fragmented through multiple SaaS vendors across multiple business units \u2014 and even across departments within a business unit \u2014 managing the relationship and spending to optimize value and get the most effective financing arrangements is a real challenge, Riley says.\n\nIf a company\u2019s procurement group and IT have weak relationships with business units, \u201cyou can rest assured the business is going to go off and do their own thing,\u2019\u2019 he says.\n\nWhat sometimes happens after a business unit purchases its own technology, is \u201cthe CIO is looked upon to \u2026 do the rear-view mirror thing,\u201d and help figure out who is going to control or manage the relationship with whatever software vendor is involved, Riley says.\n\nTo avoid this, CIOs are getting more deeply involved earlier in the spending process.\n\nMapping out tensions\n\nSteve Miller, vice president and CTO of Steelcase, which manufactures furniture, interior architecture, and tech products, makes no bones about the fact that IT needed a makeover a few years back. There was a recognition that \u201ca lot of our behaviors and culture and practices were not compatible with a digitally transforming business,\u2019\u2019 he says.\n\nFor example, in the company\u2019s online procurement process, a lot of business leaders in offices outside of the US were quickly standing up storefronts to sell products to make order flow more seamless, Miller says. But these business leaders didn\u2019t have a technology or security background \u2014 and were circumventing IT. \u201cThey wanted to move quickly, and the concern was, \u2018If I involve IT they\u2019ll hold me up.\u2019\u201d\n\nMiller calls that a \u201cfair characterization,\u201d and says that instead of IT continuing to take a one-size-fits-all approach to ecommerce, his team needed to recognize that different countries have different needs. \u201cWe had to help identify tiers of capabilities.\u201d\n\nIT \u201cmapped out the tensions we were feeling,\u201d Miller says, and started thinking about where they needed to pivot to be successful. One clear area was in the relationship with the line-of-business (LOB) leaders. Not involving IT in tech spending decisions translates to \u201ca relationship management challenge to understand what that area of the business is trying to accomplish, what\u2019s behind the behaviors they\u2019re exhibiting, and how can we change the way we work to better steer the company as a whole in the right direction,\u201d Miller says.\n\nWhen offices in other countries were purchasing their own software, Miller says there was duplicate spending \u2014 a common issue when IT is not involved in LOB tech spending.\n\n\u201cThey were recreating elements of their solution that were [already developed by IT] and it was wasteful and slowed them down,\u201d as opposed to using some of the interfaces and templates IT built, which would have helped them move faster, he says.\n\nMiller estimates that Steelcase has saved nearly 20% by getting their offices in other countries to use the templates.\n\nNow IT approaches the relationship with more of a laser focus on what each area of the business is trying to accomplish, and that has led to quarterly discussions on how to make good tech investment choices and where IT can help, he says.\n\n\u201cIt wasn\u2019t about trying to stand in the way of lines of business on tech spending but making better decisions together,\u2019\u2019 Miller says. \u201cIt\u2019s about understanding our role in the discussions and facilitating the discussions across business groups.\u201d Both sides now \u201ccome away not feeling it\u2019s us against them.\u201d\n\nFostering a culture that encourages tight partnerships\n\nAt TIAA Bank, IT is becoming increasingly involved in driving the research and selection of software platforms. CIO John Elton says it\u2019s part of a culture change promoting a more collaborative working relationship and tight partnership between IT and the bank\u2019s business units.\n\nIf business unit leadership has confidence that IT will work in their best interest, both groups will not just collaborate but also get to show their strengths, Elton says.\n\n\u201cIt\u2019s always been my philosophy \u2026 that your best results come when IT and the business partner together,\u2019\u2019 he says. \u201cWhat I try to instill in everybody is if technology is laser-focused on meeting the business needs, that partnership will naturally grow, the trust will grow, delivery will improve.\u201d\n\nA change in culture at Fidelity Investments has also fostered a more natural partnership between IT and the business, says Brooke Forbes, CIO and head of technology for personal investing. \u201cWe made a really significant shift in our operating model to move to agile full-stack,\u2019\u2019 Forbes says. \u201cWe wanted integrated digital partnerships between business, IT, and operations, and [go] the final mile and have fully mashed-up teams of business and technology people.\u201d\n\nPrior to the operating model shift, there were \u201cpockets of shadow IT\u201d due to a unit needing to make a tech purchase rapidly, she says.\n\n\u201cPre-agile and operating model, you could see some of these [buying] decisions made\u2019\u2019 outside of IT, Forbes says. But leadership began to see more positive outcomes when business units learned about technology \u2014 so much so that Fidelity now devotes 20% of every week to cross-training all employees through a global program called \u201cLearning Tuesdays.\u201d\n\nNon-IT employees can learn about topics such as data as a service, AI, personalization, web and mobile technologies, and blockchain, she says.\n\nTo ensure that business groups use the appropriate tools and that IT isn\u2019t circumvented in the purchasing process, Forbes says she has engineers sit in on meetings with various internal teams.\n\n\u201cI think one of the best things we\u2019ve done is [implement] the notion of IT not being separate,\u2019\u2019 Forbes says. \u201cIT is part of all business teams, and this shows up at the leadership table. \u2026 That\u2019s how baked it is.\u201d\n\nFrom identifying vendors to requests for proposals, interviews, and setting requirements process \u2014 everything is done jointly, Forbes says.\n\nThe fact that there is now joint decision-making and all associates are plugged into agile operations teams \u201cis the underpinning for us of our culture of co-creation, collaboration, and communication on everything we\u2019re doing,\u2019\u2019 she says.\n\nIT as a catalyst for business value\n\nIf IT wants to better collaborate with business units on tech spending, it comes down to building solid, trusting relationships. It\u2019s not rocket science, just something both sides need to work at, leaders say.\n\nFor TIAA\u2019s Elton, to prove its value when it comes to spending on new technologies, IT needs to adopt a less myopic view of its worth. Traditionally, IT leaders would look at technology and think solely of what it can deliver versus really being focused on the business and then seeing a tool as a catalyst to meet those business needs.\n\n\u201cSo it\u2019s a matter of perspective, and the leader in general, of any tech organization, usually sets that tone,\u2019\u2019 Elton says. Leaders on both sides of the aisle have to be very open to the strengths both bring to the table and the business has to trust that IT has its best interests at heart, he says. IT, of course, must work to build that trust by demonstrating this to the business.\n\n\u201cI put my business\u2019s needs in front of my own team\u2019s needs, in a sense,\u2019\u2019 Elton says. IT must recognize that the ultimate goal is to help achieve business outcomes and implement the technology that will help make that happen, \u201cwhether it\u2019s cool or not.\u201d\n\nWhile it\u2019s tempting to go for a product with the newest features, the caveat is that \u201cIT is responsible for security, availability, performance, innovation, and speed to market and our own efficiencies. We can\u2019t ignore our own needs in that regard and we can\u2019t sacrifice them on behalf of the business,\u201d Elton says.\n\nHow to get the business-IT relationship right\n\nForbes says there are several ways IT can better collaborate with lines of business on tech spending, and it starts with investing in the relationships. The second thing IT can do is be an advocate for business leaders and encourage conversations about problems they have and how technology can solve them.\n\nShe also recommends organizations consider deploying an agile model across the enterprise. \u201cWhen I talk to other CIOs, they say they\u2019re doing agile but they may be doing it in the IT division,\u2019\u2019 she says. Forbes also advocates for forming fully integrated teams.\n\nKathryn Guarini, CIO of IBM, says that IT needs to understand what individual business units need \u2014 \u201ctheir strategy, opportunities, and challenges \u2014 so that we can prioritize investments in areas that will make a marked difference to their business. At the same time, we co-create with our businesses, becoming early adopters of IBM\u2019s products and services, providing proof points, and demonstrating the value of emerging technology deployed at enterprise scale.\u201d\n\nMiller of Steelcase says IT must be aware of the sense of urgency that business units have. \u201cThat\u2019s what they\u2019re afraid of, that IT will make it take as long as it takes\u201d to purchase technology, while IT is concerned about issues if something is done wrong.\n\n\u201cBalance their needs with your need to do it safely,\u2019\u2019 he advises. \u201cMake sure they understand we get it.\u201d\n\nUpperEdge\u2019s Riley says it can be \u201cdangerous\u201d for businesspeople to negotiate SaaS partnerships \u201cwithout the advice of an experienced CIO. So we recommend balancing the skillsets of the CIO to manage tech partner relationships at an enterprise level while pushing accountability for project outcomes and operating effectiveness to the business units.\u201d\n\nHe also suggests that the CIO have direct participation at the executive table to understand the business strategy. \u201cIf they don\u2019t have a seat at the table that\u2019s a problem unto itself,\u2019\u2019 he says. There needs to be annual or quarterly planning and alignment of the project portfolio to the business strategy, Riley says. CIOs also need a strong team of vice presidents to not only form strong relationships but \u201cface-off with each of the lines of business, because the CIO can\u2019t do it all.\u201d\n\nRiley says he advocates for CIOs to push the business to have accountability for the transformation they\u2019re undertaking \u201cwith a major proviso that the CIO is also supporting them not only on the execution of the program but on the management of the vendor relationship at the enterprise level. I think there are some business leaders who are smart enough to know what they don\u2019t know.\u201d\n\nFor those business leaders who don\u2019t fall into this category, Riley says they will eventually see where the gaps are in their vendor relationship management strategy if they don\u2019t engage the CIO.\n\n\u201cIf they let it go too far, you\u2019ll inevitably see the chief procurement officer or CFO look at the disaggregation of spend across all these P&Ls with specific vendors, and there will be a reckoning,\u201d he says.