Disrupt or Innovate? Decentralization Opens Up Opportunities

New research, commissioned by VMware and based on surveys conducted by the Economist Intelligence Unit (EIU) and Vanson Bourne, surveyed IT and business leaders worldwide and found that businesses across all industries and every part of the world are grappling with a common problem: IT decentralization.

What Is IT Decentralization?

Traditionally, the IT department served as the principal source of technology within the enterprise. IT set the standards and operated as a central resource for business users. That model is shifting. Business users are becoming more tech savvy, and lines of business (LOBs) increasingly see tech as a differentiator. The research found that both IT and business leaders agree that technology has become increasingly decentralized over the past three years.

The survey further discovered that the decentralization of IT is being driven by LOBs which, in an effort to compete, are increasingly building and buying their own apps, authorizing devices, and becoming key decision makers for technology purchases without going through the IT department.

Decentralization: Two Views

Technology is increasingly accessible and affordable, and IT departments can’t keep pace with the explosion in demand from business users. Decentralization is happening against the wishes of IT teams who believe it is causing a lack of clear ownership for IT, a duplication of IT expenditures, and the implementation of unsecure solutions.

Contrary to IT’s point of view, LOBs view decentralization positively and point to its role in driving innovation, increasing responsiveness to market changes, launching products more quickly, increasing employee satisfaction, and attracting talent. Business users note that technology is so embedded in products and services that business expertise is necessary to understand and deploy tech solutions properly. Business units are embracing technology and driving innovation in order to realize efficiency, company, and market gains.

Lines of business view decentralization as a side effect of innovation. They want it to continue, or accelerate, and generally feel IT can’t keep pace. IT professionals are concerned about the disruptive implications of decentralization and would prefer to maintain control over IT in the enterprise. Decentralization is changing the traditional balance between IT and business users.

Finding Common Ground on Security

According to the research, both business users and IT professionals agree that decentralization has created increased security vulnerabilities. Decentralization leads to inefficiencies and vulnerabilities that could ultimately jeopardize the business.

Interestingly, despite no longer acting as the central resource for the purchasing, implementation, and proliferation of technology across the enterprise, a substantial majority (77 percent) of those surveyed still view IT as responsible for security.

This gap between what IT controls and what IT is responsible for is particularly worrying. Despite the disruption caused by decentralization, concerns for cyber security offer the ideal opportunity for IT and business users to come together to collaborate on solutions.

Working Together to Set Standards

According to the research, 73 percent of those surveyed agree that the IT department should be responsible for enabling other LOBs to drive innovation. More than 64 percent say the IT department should be responsible for enabling other LOBs to drive innovation, but that IT must set strategic direction and be accountable for security.

Decentralization is breaking down traditional silos between IT and business units, shifting roles and creating possibilities for new syntheses. Focusing IT resources on empowering lines of business, while still maintaining security and standards, may provide a new model for IT in the enterprise.

IT as Consultant

The decentralization of technology isn’t just about the software, hardware, and services. It’s also a fragmentation of IT standards, decision-making, and buying power—all of which were once concentrated in the IT department.

As the relationships between technology, business units, and IT shift, new models and possibilities are emerging. When asked to describe an “ideal IT model,” the top survey responses include automating security within applications, the ability to move applications across multiple clouds, and more choices to move to different cloud providers. Acting as a consultant, understanding business needs, and offering solutions and guidance is another role IT can play in a decentralized environment.

New Disruptions, New Opportunities

The decentralization of IT across the enterprise is a worldwide phenomenon affecting businesses of all types. The research confirms a strong majority (64 percent) agree decentralization is opening new opportunities for IT. Opportunities to collaborate around security, set standards, and act as a consultant to empower LOBs all offer ways for businesses to embrace decentralization.

Listen to a podcast series with the Economist Intelligence Unit (EIU), in which VMware further explores the topic of IT decentralization with EIU senior editor West Coghlan.