The amount of outside software companies are tapping has skyrocketed in the last 10 years. CIOs say they’re leaning on other areas of the business to help them manage it—but that comes with its own challenges.
Again, with more software procurement and management happening outside IT, there are also concerns about paying for duplicate services, data integration challenges and potential loss of cost efficiencies.
The growth is fueled in part by the greater number of tools and capabilities on the market today that organizations are looking to take advantage of. Typically organizations have a handful of major key vendors, followed by a long tail that are used for smaller services. There have been cycles of trying to rationalize, consolidate and reduce the number of vendors used, but there’s also an acceptance that having more vendors makes companies less dependent on bigger ones.
Moreover, today’s AI hype is also fueling the fire as organizations look for new vendors to take advantage of cutting edge technology.
Adding to the deluge, software companies have also wised up to the idea of business counterparts’ involvement and have shifted their sales strategies to target end users.
The existing vendors are targeting business people when they have a new solution they’re trying to sell and instead go through IT.
The dreaded horror of “Shadow IT,” in which employees skirt the IT department to buy their own cloud services, apps or other technologies, hasn’t returned in full force since the days when iPhones and app stores initially became ubiquitous in corporate settings. But with an increasingly digitally savvy workforce that’s increasingly involved in the software management process.
Moderna CIO said that when the company was developing and distributing a vaccine during the Covid pandemic, the number of software subscriptions it was using exploded because the company was prioritizing moving as quickly as possible.
Since then, he has put a stricter process in place involving more due diligence on cost and value from the IT department.
To be sure, consolidation of unnecessary, expensive and duplicative vendors has been its own trend as companies have looked to get leaner in tougher economic times.
But some companies also say they need to grow the number of existing vendors they use to take advantage of cutting-edge solutions just hitting the market, especially in areas like generative AI.
“You can’t depend wholly on just your top partners to come give that kind of innovation,” said the chief information officer of tobacco company Reynolds American Inc. “I have to look at small things that I can do that are available now.”
As far as collaborating with the business to bring in new software, RA Inc CIO said, “It’s not always seamless, but what we’ve learned is that if we don’t do it, we’re setting ourselves up for failure.”