1. byDAVE YIN
@yindavid
IT’S NOT EVERY day that you are
told you no longer matter.
For Ted Maulucci, this is exactly
what happened when, at a CIO
summit, a sponsoring vendor
walked in the room.
“We don’t care what you’ve got
to say because we’re going to sell
to the line of business and they’re
going to make you put us in,”
Maulucci paraphrased. The CIO
of Tridel, one of Toronto’s largest
condo developers, had a look of
disbelief as though he was hearing
it for the first time.
The vendor, whom Maulucci
declined to identify, was talking
about selling technology to depart-
ments in a company such as mar-
keting, finance and HR instead of
the IT department, whis has been
the go-to place for solutions.
“It was arrogance,” Maulucci
said.
While not all vendors are so
bold as to pursue a new business
opportunity with such reckless
abandon, the market conditions
are right.
Employees are doing work on
their personal devices.
Business departments are
increasingly going around IT to
purchase solutions to their busi-
ness-driven problems.
Companies such as Cisco Sys-
tems, without discussing the
potential implications, are certify-
ing partners in selling to line of
business (LoB) leaders.
There are whispers that CIOs
are losing relevance.
In this regard, the numbers
paint a clear picture.
According to IDC research from
2014, business now funds 61 per
cent of technology projects. A
detailed breakdown places funds
into five categories: business-
funded shadow IT, business-
funded sanctioned IT, business-
funded joint LoB-IT projects, and
IT-funded joint LoB-IT projects,
each hovering at around the 20
per cent mark.
It comes as no surprise then
that the fifth category, IT-funded
projects purely for the IT depart-
ment accounts for only 19 per cent
of all tech spending.
March 2015 computerdealernews.com12
TOP CANADIAN CLOUD PROVIDERS
FEATUREREPORT
Selling to the Line of Business

2. computerdealernews.com March 2015 13
FEATURE REPORT
Meanwhile, disparity in new
technology spending between
the IT department and the line
of business is also at an all-time
high. After infrastructure and
essential software maintenance
costs, IT has only 21 per cent of its
budget left over for new projects
compared to LoB’s 38 per cent.
While IT spending (with the ex-
ception of healthcare IT) is flatlin-
ing at a compound annual growth
rate (CAGR) of 1.8 per cent,
departments such as marketing
are driving tech expenditures with
a 5-year CAGR of 9.5 per cent, ac-
cording to IDC projections.
It’s hard not to see why.
When asked about their pain
points and imperatives, CMOs,
CFOs and HR executives all point
to the pressures of greater effi-
ciency.
However, they also identify
needs that IT being currently
deployed in their company is not
able to accomplish, namely the
ability to analyze big data and
take advantage of mobility.
“It’s not just about data input,
it’s about analyzing and under-
standing what the numbers mean
so that we can use the informa-
tion to make better and faster
business decisions going forward.
That’s one of the reasons why we
are looking for a new ERP sys-
tem,” said Winnie Leung, CFO at
Moneris Solutions Inc., at a CDN-
hosted workshop addressing line
of business concerns in October.
These pressures, perhaps, come
at a bad time for IT, as it grapples
with the transition from on-prem-
ise solutions to the adoption of
cloud and other emergent tech-
nologies, a phase that consulting
firm Avanade calls “two-speed IT.”
“Time spent managing the
old legacy systems continues to
distract IT staff – 34 per cent of
Canadian IT staff’s time (36 per
cent globally) is spent managing
and maintaining legacy systems …
IT staff must balance the support
of legacy systems with the need
to continuously innovate in order
to stay ahead of the competition,”
said an April 2014 report commis-
sioned by Avanade.
Furthermore, in terms of senti-
ment, among the 1,003 C-level
executives the company surveyed,
a vast majority – 67 per cent in
Canada and 79 per cent globally
– believe “they can make technol-
ogy decisions for their depart-
ment better and faster without the
involvement of IT.”
While selling to these new eager
buyers may sound like a great
new bandwagon for IT providers,
Maulucci is quick to put on the
brakes.
“Ultimately it’s going to fail,” he
said, referring to the aforemen-
tioned vendor. “For something to
propagate, it has to have validity
to it, in this case there’s no valid-
ity. If anything it’s going to pull a
company apart instead of strategi-
cally align them.”
Jeff Gilchrist, Canada general
manager of Avanade Canada,
echoed this sentiment. He said
that for an IT provider, selling to
the line of business is not a recipe
for long-term success.
“If you have a software as a
service solution, you may satisfy
an immediate itch, but that whole
issue of how it integrates with the
rest of the company could become
quite complex,” he said. “If you
do not have a relationship with
the IT department as a systems
integrator, you may win a battle,
but you’re never going to with the
war.”
Rather than pick sides, the
channel opportunity may lie in
bridging the gap.
According to Greg Myers,
senior vice president of sales and
marketing at Tech Data Canada,
channel partners should act as
an intermediary between IT, with
whom they traditionally have a
relationship and other depart-
ments whose business needs may
not be directly supported by the
IT department.
“IT is responsible for a lot of
things, but they’re not really
responsible for improving the per-
formance management process or
improving the expense manage-
ment cycle. Those requirements
are being born within the actual
operating departments within
companies,” said Myers. “One
of the big opportunities for the
channel is to help educate the IT
organizations about these emerg-
ing business requirements that
they face as an organization.”
In order to do this, he said,
channel partners must should
expand their sphere of influence
by reaching out beyond the IT
department by developing those
conversations with the CMO and
CFO, understand their challenges,
be a resource and work with their
existing framework.
“If you can do that you’re value
to that customer grows exponen-
tially,” he said.