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2017 Budgets Down? Innovative CIOs Get Strategic With SaaS.

11/30/2016

It’s a never ending cycle for enterprises. No matter what 2016 may have brought, there are countless reasons that budgets are increased or decreased from year to year. Saving cash for acquisitions, cutting back on excess, leveling out margins, expected drop in demand—the list could continue. No matter the reason for the shift, it becomes the responsibility of executives to adjust their budgets accordingly and find ways to optimize and cut back on their spending.

According to a recent survey by Corporate Executive Board (CEB), “Just over half of organizations expect an increase in their IT budgets next year [2017], and 38% expect a decrease, the survey found. A quarter of those surveyed expect a greater than 10% change.”

IT executives have added pressure to monitor and understand technology that’s being utilized across the entire enterprise. Regardless of office location or department, they must have their eye on technology spend, and most importantly, utilization.

Innovative IT Executives Create Visibility to All SaaS Applications

As is the case with many innovative enterprise organizations, department leaders are being asked to evaluate, purchase, and maintain their SaaS tech stacks—a responsibility that used to live solely with IT and Procurement. With the added responsibility at the departmental level, it’s more critical than ever before that IT has visibility into the technologies that are being utilized—and by whom.

Today, department leaders can evaluate software that their team needs, make decisions on how it fits into their respective budgets, maintain user licenses or choose to increase or decrease users, purchase services and even work with vendors on integrations. And ultimately take responsible for the success (or failure) of SaaS applications in their own departments. With the new streamlined approach, the software evaluation and purchase process happens in weeks or months, rather than months or even years in some cases.

SaaS applications have become simple to purchase, often requiring just a few clicks of a button and a credit card, so employees are purchasing applications on their own, referred to as “Shadow IT”. Employees and teams are making innocent and small purchases on their own, which is generally a very positive and healthy sign.

“More and more CIOs are coming to the realization that this spending is inevitable and actually healthy,” Andrew Horne, an IT practice leader at CEB Global said. “It’s a sign that the rest of the organization cares about technology and wants more of it.”

Although the evolved decision making processes for technologies reflects a positive change, IT executives need visibility into their entire SaaS tech stacks in order to help guide individuals and departments during the purchase process. When IT departments gain complete visibility into the technologies each department, team, or individual is using, it helps everyone across the organization make more economical decisions—which is especially important when budgets are being reduced.

Innovative IT Executives Orchestrate Strategic IT Spending

Once visibility is obtained across the organization, IT executives gain visibility into spending across each department, each geography or office, and even each role. Once that happens, IT executives can shift their mindset from one of control to one of orchestration, which is beneficial for the entire organization.

“What’s more, Horne says that [IT executives] at the most advanced companies do not aspire to control business-led IT spending. Rather, in some cases they encourage that spending, but look to coordinate it so they can help avoid duplicated spending and efforts.

The article gives the example that a IT executives may want to see if the Asia marketing team has purchased the same software that the New York marketing team has already bought. But the purpose of that isn’t for control, but rather to influence teams and departments towards certain technology spending and to ensure the entire organization is inter-connected.

Innovative IT Executives Create An Environment Of Transparency

When it comes to trimming down technology budgets in 2017 and beyond, IT executives that have visibility into all software being used across the organization—regardless of who purchased it or how it was purchased—can share valuable information across the enterprise. If IT executives aren’t aware of all of the technology being utilized, though, then how can they possibly be strategic, especially when making critical budgeting decisions that impact the entire organization?

In order for IT executives to gain visibility and orchestrate strategic IT spending, they must create an environment of transparency and empowerment and provide the tools that others across all departments and roles can leverage. CIOs and IT executives must learn to consider the entire business and think about the organization’s goals, first and foremost, rather than try to hyper-control the technology that’s purchased. In 2017 and beyond, transparency in technology spending is the new black.

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