Tech buying in business and governments is clearly shifting from the sole or primary control of the CIO and the tech management organization and into the hands of business leaders.  But how much is this happening? Anecdotal comments and surveys – including Forrester’s own Business Technographics surveys – suggest that most tech purchases are now controlled by business executives.  However, in our just-published report, “C-Suite Tech Purchasing Patterns,” Forrester’s analysis shows that the shift of tech buying from the CIO to business executives is much less dramatic, with just 5% of all new tech purchases fully controlled by business by 2018.  Moreover, this shift varies dramatically by C-level executive. CMOs and eCommerce heads have the highest proportion of new project spending under their control, but CFOs, COOs, supply chain heads, and heads of customer service are much less likely to go it on their own.

The big issue in making statements about who is buying technology is the fundamental difference between how consumers buy technology and how businesses and governments buy tech.  In business and government, there is seldom one person who makes the decision to buy a piece of technology.  Instead, there is a complex process of identifying a business need, finding and choosing a vendor with the right technology solution, implementing that solution, and making sure it is working well.  Different stakeholders will be involved in each stage of this process.  The growing tech-saaviness of business leaders and the wider availability of cloud solutions does mean that business leaders are playing a bigger role in the front end of this process. But the persistence of licensed software, the growing adoption of cloud as a replacement for licensed software, and challenges of implementing and optimizing solutions mean that CIOs and tech management teams still play a dominant role in overall tech purchases by businesses and governments.

Key findings of Forrester’s analysis of data on actual tech purchases:

  • Only about 30% of US tech spending goes for new projects, where business involvement is going to be greatest.  70% goes for maintenance fees, outsourcing contracts, infrastructure expansions and refreshes, telecom services, and other operating and maintenance spending.
  • Of the new project spending, about 60% goes for new projects that directly support business operations. The rest isfocused on CIO projects like security, cloud, employee collaboration, and new IT infrastructures.
  • Excluding these IT-focused projects, business leaders are playing the principal role in identifying the need for new technology solutions.  A quarter of all business-oriented new project spending will be controlled or led by business by 2018, up from 17% in 2012.  Partnerships between CIOs and business leaders on new projects present almost a third of business-oriented new project spending.
  • CMOs are the most likely C-level executives to have taken full control of their tech spending. We estimate that about 36% of all marketing technology-related new project spending will be fully controlled by CMOs by 2018, with another 19% of this spending initiated by CMOs but then involving the CIOs.  However, the former proportion has stopped growing while the latter has been rising as CMOs have realized the importance of working with CIOs to implement solutions that cover the full customer lifecycle.
  • eCommerce heads and chief procurement officers (CPOs) also have high proportions of relevant new project spending. By 2012. they will fully control (23% and 15%, respectively), but higher proportions where they initiate projects but then involve the CIO (23% and 33%, respectively).
  • On the other hand, CFOs, COOs, and heads of customer service have low proportions of business-only new project spending, at 9%, 4%, and 7%, respectively.  Instead, these executives tend to form partnerships with CIOs to choose and implement the new technologies they need to support their business operations.
  • The proportion of business-related new project spending where the CIO initiates the project or takes total or dominant responsibility is declining, from 51% in 2012 to 43% in 2018.
  • But CIOs are still involved in implementing and managing the vast majority of new project tech spending, including all but 9% of the implementation of business-oriented new projects.

Drafted by Robert Valdovinos, Senior Research Assistant