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Business unit spending opening up compliance risks

SAM specialist Snow Software has highlighted the concerns of CIOs that the growing spending power outside the IT department is putting the business in danger of becoming non-compliant

The growing importance of corporate buyers outside the IT department is having repercussions for those trying to keep on top of licenses and staying on the right side of being compliant.

The research covering the shift in buying power from the IT department to lines of business has been stacking up along with indications that the long anticipated impact of millennials is being felt in the technology purchasing process.

Adding to research from IDC and Spiceworks and the comments of other vendors, comes an investigation into the market from  Snow Software, which has highlighted a growing divide between the IT department and the rest of the business.

Given its position as a software asset management specialist there are implications to business units spinning up cloud apps and services.

The Snow research found that 24% of firms have at least half of the tech spend going through business units and there were compliance implications.

The research found that 90% reported that audit preparation was becoming more time consuming and complex and 83% were concerned that cloud spending could get out of control without the visibility of what was being spent.

For a quarter of those quizzed the feeling was that they are already starting to lose control of costs and 60% were worried about the threat of non-compliance.

The flipside of the coin is the potential for lines of business to help deliver improved agility and innovation, if they are working in a controlled environment, and the opportunity to the IT department to focus on more strategic areas.

“There is no question that many CIOs are now grappling with the divide between business and IT as purchasing patterns continue to shift, a divide we call the Disruption Gap. However, CIOs needn’t fear this shift. This research illustrates that forward-thinking CIOs are adapting to become a trusted advisor to the business,” said Axel Kling, CEO at Snow Software.

“Increasingly, the CIO is required not just to define and lead individual projects, but to provide the CFO and the executive team with an understanding of technology budgeting, aggregation of spending plans across the organisation (regardless of owner) and assurances that money is being spent wisely," he added “These responsibilities are impossible to deliver without insight into technology consumption. This requires mature processes and actionable analytics.”

Read more on Software-as-a-Service (SaaS) Applications

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