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Does the CIO Really Need to Control the Entire Tech Budget?

tech budget

For several years, CIO professionals were largely in charge of how technology budgets were invested. However, the added pressures brought on by the pandemic paired with new efforts to focus on business relationships have initiated changes in that strategy. What’s more, the proliferation and decentralization of SaaS has made everyone within organizations buyers, from leaders of LOBs to individual employees expensing SaaS.

So, let’s discuss how tech budget ownership has changed and examine how CIOs are enhancing company-wide communication as a key strategy for initiating smarter investment decisions and improving morale within the organization. 

2022 Priorities for CIOs

Organizations spend more and more on SaaS every year, bringing the cost of SaaS solutions for many companies to be second only to headcount in terms of cost. However, this can prove costly, especially when you consider the uncertain economic times constantly floating on the horizon. That’s why now, more than ever, it is important to get your tech optimized and well-managed.

In response, discerning CIOs are taking into serious consideration where their true priorities for driving the business are. While their tech budget is certainly important, there’s a clear shift in priorities among CIOs.

According to the 2022 State of the CIO report, these priorities include:

  • Cultivating IT-business partnerships, which IT leaders are now investing approximately 30% of their time pursuing
  • Controlling costs and expenses
  • Partnering with CFOs in order to make these efforts a reality and ensure that purchasing decisions make sense financially

Read an emphasis on the relationship between CFOs and CIOs here. This partnership is key to making these priorities realities. CFOs are ultimately responsible for the ones that work with the different departments within organizations to make sure the dollars make sense, and that’s only possible when there’s a complete understanding of SaaS assets. 

In an episode of our SaaSMe Unfiltered podcast, Leah Tubb, a Program Manager of IT Agriculture, Planning, and Innovation at Atlassian, spoke with us about how establishing a system of collaboration and governance allowed them to create what they call an “operational rhythm” to SaaS Management. 

“We look at payments in Zylo.” Said Tubb. “We look at what we’re also discovering in our internal SAML tool and, hey, this thing was brought in and we have a single sign-on, but it hadn’t gone through our internal governance process. So, let’s put it through there.”

Tubb went on to describe how Atlassian found a necessity in knowing what is coming and out of the SaaS portfolio, and how spending drives prioritization.

IT Doesn’t Have to Own the Entire Tech Budget to Drive Strategy

According to Zylo’s SaaS Management Index, IT departments no longer own the entire tech budget. Today, IT departments own 31% of SaaS spending, as well as 18% of all SaaS applications. That’s a 15% increase in spend ownership from last year, while app ownership decreased by nearly 22%.

This change is not exactly a negative one, nor should it be the key focus of the IT department’s concerns. It’s far more important that IT departments and CIOs still have full visibility into purchasing decisions, knowledge regarding how tech purchases will be deployed, and close involvement with evaluating new technologies to determine the potential for future use.

Collaborating with the Line of Business owners, finding solutions for various inter-department concerns, and breaking down barriers between leaders is well worth the time and effort. IT leaders and CIOs who are capable of ensuring these collaborative efforts will secure success and much-needed tools for the organization as a whole.

Of course, these efforts are far more complicated than checking boxes on a list. IT professionals are in a unique position to lead their departments collaboratively by behaving as an example. Doing so can only be a positive, as it will most certainly make 2022 and the approaching new year one in which entire business teams can work toward technological and business-related shifts as a cohesive unit.

CIOs can and should encourage the following:

  • Having open-minded approaches to the discovery and adoption of new technology
  • Empowering your line of business owners to drive innovation forward and increase productivity as a result
  • Using the corporate technology stack as a differentiator that allows IT to accelerate the organization’s revenue growth
  • Leading the enterprise-wide cloud shift conversations by having full visibility into all cloud-based spending, utilization, and sentiment

CIOs Emphasize the Value of Fostering Relationships across the Business

On top of this ever-growing list of priorities and their associated challenges, many CIOs now emphasize how crucial it is to foster working partnerships with other leaders throughout their organization. 

The relationships between business leaders, CIOs, and lines of business are among the top priorities in need of cultivation, and for good reason.

When IT is considered a business partner, CIOs are more likely to be directly involved with approving or denying SaaS solution purchases as well as choosing vendors. But it doesn’t stop there. Having regular communication with department leaders is another must. This is especially true when team leaders share common goals in improving ROI, aligning the right tools with the business’s needs, and SaaS stack efficiency.

In terms of cloud-based purchasing, CIOs are looking to optimize stack efficiency while CFOs are looking to reduce costs and optimize spending. So, in the end, they’re working towards the same goals from different perspectives. That’s why by developing the ability to work together, they have a far higher chance of reaching the best possible outcomes for the business as a whole. 

Brad Pollard, the former CIO of Tenable, joined us on SaaSMe Unfiltered to discuss his experience with CIO and CFO relationships.

“CFOs go ‘Why is our spend this high? What can you do?’” said Pollard. “And when you can go, ‘Alright, well look. There are five redundant applications that we have here. Can we get it down to one? Can we get it down to two? Who are the stakeholders? Who’s using it? Who’s logging in?’”

In this, you can see how when CFOs and CIOs collaborate to achieve the same goals and are able to utilize the same data, it’s possible to mobilize projects in a way not possible before.

“But if you don’t have that data, you can’t even have those moments.” said Pollard. 

Your Tech Budget is Important, But Business Relationships Must be a Priority

While developing positive, communicative relationships between IT and department leaders is a must, maintaining and improving said relationships have to be a priority. Like any professional relationship, department leaders must be willing to put effort into the interactions they have with one another. Through open-minded, collaborative efforts, each department within the organization stands to benefit.

Let Zylo’s enterprise cloud intelligence platform serve as your organization’s bridge to draw leaders, departments, and groups together and enable them to operate as a well-balanced unit.

Once you have full visibility into all cloud spending, utilization, and sentiment, both teams can optimize their tech budgets and applications to benefit the company as a whole. Through these efforts, you may find more common ground between departments than you initially suspected.

Looking for ways to make the most of your tech budget? Visit our SaaS Cost Optimization Resource Center for ways to maximize your SaaS investments and save money.