IT department still holds the purse strings, not lines of business - Cisco

Chuck Robbins says claims that lines of business would control IT budget were "aggressive" and "overstated"

Claims that lines of business (LOB) would have more and more power over IT spending have turned out to be "aggressive" and "overstated", according to Cisco's CEO Chuck Robbins, who said the IT department still has an important role in procurement.

In recent years, analysts and channel players have claimed that individual business units within customers are getting more and more power over IT budgets - partly thanks to the boom in cloud services - meaning the central IT department has a weakening grip on the purse strings.

In 2013 IDC said that 61 per cent of enterprise IT projects were funding by the business, rather than the IT department.

But years on, this trend has not played out, according to Robbins, who explained his theory to partners at its Partner Summit in San Francisco.

In a press Q&A following his keynote, he said: "The initial analysis and predictions about how that was going to occur were way too aggressive. We talk to CEOs who two years ago said ‘I need to bring my OT [operational technology] and my IT organisations closer together'. Every time we have driven any type of convergence in the industry or at Cisco, the organisational battles become things to be resolved.

"I think the perception that everything was going to move to the line of business was overstated. We tend to have major hype cycles on these things. I think what you're really seeing in the line of business is they are spending dollars they had... but they're spending on technology because it solves the problem more effectively with technology. But now they're doing it with the IT organisation."

Cisco's senior vice president for global channels Wendy Bahr echoed Robbins' sentiment but said both the IT department and lines of business are key areas the channel should be targeting.

"At one point in time the headlines were that all IT spending was moving to the lines of business," she said. "And of course we saw some of IT's budget move to lines of business or be influenced by the lines of business. In reality, what we're seeing is a very hybrid environment. Budgets are being heavily influenced by line of business buyers but at the same time security has never been a greater threat or at the top of a CEO's mind set. So we're encouraging our partners to explore sales opportunities with line of business buyers. It's really important to understand the needs of the business and to start the conversation there - the ‘customers-in' approach. Then understand what technology helps solves those business challenges and go back to IT so they become an ally and supporter, rather than a roadblock because they don't understand what's happening.

"Many of my partners tell me it's surprising to them that when they're inside a customer there is less communication than they thought between those groups. I agree with Chuck's comments but I also see the most profitable partners are those selling to line of business - including them in the conversation."

Chris Deadicoat executive vice president for worldwide sales Chris Dedicoat added:
"I'm sure I read the same publications as you and the comments were it is moving from [IT] to [lines of business]. But the reality is it's an ‘and' strategy. We send very strong messages to our sales force that you have to address both."