Shift in ownership of IT dollars: Competition makes everyone better

Note: This is the second of three blog entries from Online Tech Director of Infrastructure Nick Lumsden reflecting on his key takeaways from EMC World 2014: 1. Speed of Change, 2. Shift in Ownership of IT Dollars, 3. Transition to IT-as-a-Service.

The days of CIOs or CTOs owning all of an organization’s IT dollars are over. Those dollars have been slowly migrating into Line of Business (LOB) budgets. Agile tightly coupled the business and IT organizations, leading to this shift. Now DevOps and the inability of internal IT organizations to respond to the increasing rate of change has accelerated this switch and LOBs are building highly specialized shadow IT organizations or looking outside for services tailored to their needs.

While CIOs still own the majority of IT dollars, LOBs are starting to take over a significant share of the IT budget, fracturing IT spend and putting multiple LOB organizations at the table for enterprise decisions. This makes the high-entry cost of enterprise solutions more difficult for those internal IT organizations as the LOBs have tighter control over the IT spending and technology solutions that will be implemented.

In other words, where internal IT organizations could previously deploy large capital to implement enterprise technology for one LOB and use it as a standard for others (i.e. wedging other LOBs into it), there is now more power in the LOBs to independently drive toward the solutions they actually want.

I lived this trend first-hand in a previous organization, having witnessed one of the largest LOBs engaging an outside development organization and forcing the internal IT to compete for the work. The result was to outsource a multi-million dollar project, signifying monumental change internally.

Of course, my initial, knee-jerk reaction was, “You can’t be doing this.” As time has passed and the industry has continued to change (and I’m removed from it, now on the outside looking in), my philosophy has shifted to see the big picture.

Being a technologist, I would love to have power over those dollars. As a capitalist in my heart of hearts, I know competition makes everyone better. A switch in ownership of IT dollars better aligns IT to the business and allows LOBs to look at many options, as opposed to being forced into one option.

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Nick Lumsden is a technology leader with 15 years of experience in the technology industry from software engineering to infrastructure and operations to IT leadership. In 2013, Lumsden joined Online Tech as Director of Infrastructure, responsible for the full technology stack within the company’s five Midwest data centers – from generators to cooling to network and cloud infrastructure. The Michigan native returned to his home state after seven years with Inovalon, a healthcare data analytics company in the Washington D.C. area. He was one of Inovalon’s first 100 employees, serving as the principal technical architect, responsible for scaling its cloud and big data infrastructure, and protecting hundreds of terabytes worth of sensitive patient information as the company grew to a nearly 5,000-employee organization over his seven years of service.