According to CIO research, more CXOs and LoBs are directly sourcing IT from vendors, despite the fact that IT leaders are trying to work more closely with them.

 

According to a new study of IT leaders by research from CIO India, the incidence of lines of business bypassing IT departments is going up--despite the fact that IT departments are trying to work more closely with them.

More than ever, Indian CIOs realize that the relationship between IT departments and lines of business needs to be intimate, if they are to drive business forward. Increasingly, CIOs are collaborating with CMOs and CHROs to execute IT projects.

According to CIO India's Mid Year Review 2014 survey, a significant number of Indian IT leaders--62 percent--say interacting with their company's CXOs and business executives was one of the five activities they spent the most time on in 2013.

During the course of 2014, that number should go up, with 88 percent of Indian CIOs saying they plan to spend time with their CXO peers.

This trend of CIOs spending more time with their CXO peers is more acute among CIOs from the BFSI sector. Ninety-four percent of BFSI CIOs say interacting with their company's CXOs is one of the five activities they will spend the most time on in 2014. In comparison, 86 percent of CIOs in the IT/ITeS sector say the same.

But, here's the kicker. Despite all that increased interaction, LoBs are still bypassing the IT department. There's a growing trend of more CXOs and LoBs directly sourcing IT from vendors.

According to CIO research, one in every six Indian CIOs report that LoBs are directly funding new IT projects.  

That phenomena is heightened in companies with revenues above Rs 10,000 crore, with 14 percent of CIOs from those companies reporting that lines of business and departments directly sourcing IT.

Companies in the IT/ITeS are seeing this trend catch up with them faster than others; 16 percent of CIOs in the IT/ITeS say that lines of business and departments are directly sourcing IT.

All of this is making CIOs jittery. Eight percent of Indian CIOs say CXOs and LOBs directly sourcing IT from vendors or the public cloud is a trend that will have most profound effect on the CIO role this year. And 15 percent of CIOs say CXOs & LOBs directly funding new IT projects will have the most profound effect on the CIO role this year.

Those in IT/ITeS companies feel this more strongly. Thirty-two percent of CIOs from the IT/ITeS sector say CXOs & LOBs are expected to directly fund new IT projects; while 21 percent say their lines of businesses will directly source IT from vendors or from the public cloud.

CIOs in the BFSI sector are less worried, with only 15 percent of CIOs say they expect lines of business to fund IT projects, and 11 percent say they expect lines of business to turn to IT vendors and the public cloud.

Part of reason LoBs have traditionally bypassed IT departments is because they view IT departments as slow and unresponsive. According to the study, more CIOs are cognizant of that fact and are taking measures to ameliorate the situation.

According to the survey, about 59 percent of CIOs feel the need to improve IT's on-time and on-budget performance with more process discipline in areas like requirements gathering and project management. They also realize that they must invest in systems that will help them engage with customers or business partners and market the IT department in such a way that the business has a better understanding of IT's capabilities and processes.

In this way, the IT department can become flexible in undertaking the challenges that business throws at them, otherwise CIOs are a risk of traveling back in time yet again to manage mundane daily IT operations that are deemed less importance by business.