IT Models Shift to Spur Innovation

By:
11/24/2015
CMO: Numbers that Count

Understanding the type of IT organization you are selling into provides some necessary insights into who the influencers are, and organizational differences you need to navigate. IDG Enterprise’s 2015 Role & Influence of the Technology Decision Maker survey looked at the IT models within organizations today compared to responses to the same question surveyed two years ago.

Today, 55% of IT organizations are centralized, giving CIOs control of the IT budget and technology assets. The remainder are federated (37%), having some IT decisions and assets distributed among business units, or decentralized (8%) with fully-independent IT business units. Large companies are more likely to favor a federated approach compared to small organizations, which makes sense given the distributed model that comes with larger, more matrixed organizations versus the ability smaller organizations have to remain centralized due to a less complicated structure (centralized: 66% SMB; 42% enterprise).

But it is also important to understand that these IT models are fluid and will continue to shift. Looking at how IT models are changing over time, we can see how centralized has moved from being the IT model for 65% of organizations in 2013 to 55% today. And there is a comparable shift in federated which moved from 27% in 2013 to 37% today. Decentralized remains a distant third at only 8% for both enterprise and SMB organizations, and has not changed over the two years.

So what is driving these changes? Innovation – the desire to create an environment that is nimble and flexible enough to capitalize on the rapid advances in technology and the market disruption – is a prime driver of how IT execs are structuring their organizations. For example, GameStop, a $9B gaming retailer, recently split its IT into four groups: Delivery, Architecture, Enterprise Strategy, and GameStop Technology Institute. After studying the many roles a modern CIO is expected to assume, GameStop decided that carving IT into defined portions and installing a leader for each would be a more effective approach.

Currently, the majority are satisfied that their IT structure is appropriate for today, but fewer think today’s model is right for the future. The larger the company, the more likely respondents are to think they need to change. For enterprise organizations, just 52% say that their current model is right for the future, compared with 60% of SMBs. As companies continue to innovate, their models will likely shift, which could be why organizations lack certainty that current models will work in the future.

Understanding the IT organization structure will also help determine who the decision-makers are and how many. For instance, within centralized models, there are an average of nine influencers, with the head of IT at the center. Within federated, that number grows to 12 and the decision makers are spread out within the organization.

For marketers selling into these IT organizations, it’s clear that recognizing these differences and staying on top of the shifts in the market can improve their ability to reach IT leaders where they are in the buyer journey.

For more context around shifting IT models, CIO’s article, “Taking IT reorgs to the extreme,” highlights some extreme models with Zappos, Aetna and dives deeper into GameStop’s IT reorganization.

Source: IDG Enterprise Role & influence of the Technology Decision-Maker Study, 2015

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