CFO gaining more influence on IT services spending

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CFO gaining more influence on IT services spending

Karl Flinders

Chief financial officers (CFOs) are becoming increasingly influential over IT services spending in Europe and North America, according to the latest research from analyst Forrester.

Over 40% of respondents said that CFOs will gain more influence over the next 12 months. This compares to 35% that said the same thing a year ago. Some 44% said CIOs would have more influence over IT spending over the next 12 months, which was a slight decrease on the previous year.

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Forrester said the IT services industry is changing because new service providers are changing how they work with customers and bypassing IT departments, instead going direct to business executives.

“The IT services industry is in the middle of a fundamental transformation of who it sells to, what services it sells, and how it delivers those services, because upstart vendors - specialising in new technologies like predictive analytics, big data, and mobile - are going around IT departments and incumbent suppliers by selling to business decision-makers,” said the Forrester report. 

The research also revealed that most buyers believe cutting costs is still influencing IT services spend.

Download Computer Weekly's research on European IT services spending priorities

IT Services Purchase Intentions 2013

This survey of over 130 European IT professionals from Computer Weekly and TechTarget examines company’s IT service purchase plans for cloud, security & compliance, enterprise applications, data centre services, storage & disaster recovery.

Contents:

  • IT services budget trends for 2013
  • Who makes buying decisions: IT or the business.
  • Most popular types of service companies
  • Most popular IT services and suppliers
  • How companies chose a service provider
  • Networks
  • Infrastructure
  • Data centres
  • Cloud computing
  • Disaster Backup and Storage
  • Enterprise Applications
  • Applications Deployment
  • Security & Compliance
  • Business Process Outsourcing

The study found that about 80% of respondents believe the need to lower IT operational costs would have moderate to significant impact on IT services spending before the end of 2013. 

UK firms in particular said lowering costs and gaining more favorable terms and conditions were top goals for supplier management.

Yann L’Huillier, global CIO at finance firm Tradition, recently told Computer Weekly that part of his cost cutting involved getting IT suppliers to drop their prices.

"We are going to a lot of our vendors and saying, 'Look the world is changing and we all need to be in business', so we want the same service at a lower cost," he said.

He said most of the company's vendors react positively to such a move and some are willing to reduce costs for a longer-term relationship.

Other findings in Forrester’s New Dynamics Shape IT Services Spending report:

  • France and Britain are the European countries most likely to freeze staff hiring and lay off IT staff, as a result of government spending issues. 
  • As a result of business executives' increased influence on services spending, 70% of IT services leaders said the biggest impact is more rigorous cost justification to prove the need for services spending. 
  • There was a 7% increase in respondents turning to a third party to build apps, compared with 2011. This was led by media, business services, and financial organisations. 
  • Software as a service (SaaS) will see the biggest increase in spending with 36% of respondents expecting to increase SaaS budgets by between 5% and 10% in the next 12 months. A total of 11% said they expect an increase in SaaS spending of over 10%.

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