EA Practitioners Have Significant Influence on $1.1 Trillion in Enterprise IT Spend

20 December 2012 ID:G00238867
Analyst(s): Betsy Burton, Marcus Blosch

VIEW SUMMARY

Today, we find 50% of EA practitioners have a significant impact on enterprise IT budget activities and decisions. Technology and service providers must capitalize on the impact of EA trends on the influence of EA practitioners on IT purchasing decisions, and target this audience effectively.

Overview

Impacts

  • In organizations supporting enterprise architecture (EA) as strategic, and as collaboration between business leaders and IT, technology and service providers will increasingly find EA practitioners influencing IT spend.
  • Organizations starting, restarting or renewing their EA efforts present an opportunity for technology and service providers to market to and influence a new generation of EA practitioners.
  • As organizations become more mature in supporting EA, they will have a greater degree of influence on IT budget allocations to products and services.

Recommendations

  • Technology and service providers — particularly of emerging technologies, business applications and business integration services — should target EA practitioners with the message of how they can help deliver strategic business value.
  • Technology and service providers must understand what their customers' current and future EA plans are, and have plans for targeting EA practitioners as one of the significant influencers of IT technology and service investment decisions.
  • Technology and service providers should position their marketing messages toward EA leaders focused on integrating with business strategic planning, impacting business and IT, and focused on delivering business outcomes.

Analysis

This research addresses the technology and service provider challenge of determining who in potential customer organizations has direct or indirect influence on IT purchase decisions. It summarizes the results of a recent survey of EA practitioners on their influence of IT (technology and services) purchase decisions, and provides advice for technology and service providers on how to leverage this audience to increase sales and decrease roadblocks.

In a July 2012 Gartner survey of EA practitioners (see Note 1), we found that 50% of EA practitioners had a significant influence over their organization's IT budget allocation — that is, either "final decision maker" or "great deal of influence" (see Figure 1). Gartner's forecast for the enterprise IT spend for 2012 is $2.603 trillion (see Note 2) (see "Forecast: Enterprise IT Spending by Vertical Industry Market, Worldwide, 2010-2016, 3Q12 Update"). Based on these EA survey results from Gartner events in North America and Europe (see Note 3), we can estimate that:

  • EA practitioners have a "final decision-making" influence on $331 billion in worldwide Enterprise IT spend.
  • EA practitioners have a "great deal of influence" on $774 billion in worldwide enterprise IT spend.
  • Overall, EA practitioners have a significant influence — that is, either "final decision maker" or "great deal of influence" on $1.1 trillion in worldwide enterprise IT spend.

However, we find a disconnect or lack of focus on the major software and hardware providers on this influential audience. Since July 2011, Gartner has taken less than 10 inquiries from technology and service providers seeking to market and sell their products and services to EA practitioners, besides the vendors specifically focused on providing EA tools (see "Magic Quadrant for Enterprise Architecture Tools") and/or providing professional services (see "Global Profile of Enterprise Architecture Use of and Spending on EA Consultancies").

The question technology and service providers should be asking themselves is: Has the discipline of EA changed such that we should market to these key influencers? If so, to whom and how? The answer, given the above survey results, is clearly yes to the first question. In this research, as well as the rest of Gartner's EA agenda, we discuss how technology and service providers can target this influential audience.

Figure 1. Overall Influence of EA Practitioners of IT Budget Decisions
Figure 1.Overall Influence of EA Practitioners of IT Budget Decisions

Source: Gartner (December 2012)

Background on Business-Outcome-Driven EA

Over the past two years, Gartner has written extensively about the fact that we are finding EA practitioners aspiring to become more strategic, increasingly reporting to business as well as IT management and collaborating with business on EA efforts. For example, in an August 2011 survey:1

  • Sixty-seven percent of organizations responded that they were restarting or renewing EA efforts, initiating EA for the first time, or taking EA efforts to the next level.
  • Sixty-eight percent of organizations stated that they are focusing their 2012 EA program on aligning business and IT strategies (37%), delivering strategic business and IT value (20%), or enabling major business transformation (12%).
  • Only 40% of EA programs report solely into an IT leader; the majority report to a business leader or executive and/or have a dual reporting relationship between business and IT.
  • Fifty-seven percent of EA programs are actively engaging business leaders in the development of EA, either collaboratively or on specific projects and programs. Only 14% responded that they had "no engagement" with business leaders.

Leading EA practitioners have abandoned past bad practices of creating generalized artifacts in the hope that they might be useful someday, or creating standards, principles and guidelines that were not expressly enforced or linked to a future-state vision (see "Beyond the Tipping Point: EA Is Strategic"). Leading EA has demonstrated a fundamental change in mindset, execution and delivery of EA by focusing on business-outcome-driven delivery. EA, today, is the discipline of proactively and holistically leading enterprise responses to disruptive forces by identifying and analyzing the execution of change toward desired business vision and outcomes (see "Hype Cycle for Enterprise Architecture, 2012"). Gartner predicts that, by 2020, the majority of Global 1000 organizations will support EA as a distinct discipline that is an integral part of business and IT strategic planning (55% probability).

Business-outcome-driven EA is an increasingly influential and popular approach (see "Enterprise Architecture Leaders Focus on Business Impact"). Here, EA begins with the business strategy and goals, identifies the trends impacting the organization, and moves to develop the future-state model (often business capabilities) that will be needed for the organization to succeed. From the future-state model, it is easy to identify which IT services will be needed, providing the basis for prioritizing and investment. For organizations using this approach, EA provides the basis for decision making around IT.

This new generation of EA practitioners offers technology and service providers an opportunity as well as a threat. Clearly, technology and service providers should develop target marketing to this new generation of EA practitioner, as they have a significant influence on their organization buying decisions. Additionally, technology and service providers must understand the priorities, strategic focus and impact of EA practitioners, or risk their ability to sell into an organization.

Here, we summarize the impact of EA trends on the influence of EA practitioners on IT purchasing decisions, and provide advice and recommendations to help technology and service providers target this audience more effectively.

Figure 2. Top Impact and Recommendations for EA Practitioner Influence on Enterprise IT Spend
Figure 2.Top Impact and Recommendations for EA Practitioner Influence on Enterprise IT Spend

Source: Gartner (December 2012)

Impacts and Recommendations

In organizations supporting EA as strategic, and as collaborative between business leaders and IT, technology and service providers will increasingly find EA practitioners influencing IT spend

As previously mentioned, our survey of EA practitioners found that, overall, 50% of EA practitioners have a significant influence over their organization's enterprise IT budget spend ($1.1 trillion in enterprise IT spend). When we look into this data in more detail, we find that 20% of EA practitioners have a final decision-making authority on purchases of emerging technology and IT management budget activities (see Figure 3). It is not surprising that EA practitioners have a high degree of influence over emerging technology purchases, since 52% of the EA practitioners that took this survey are reporting directly to a CIO or CTO (note that 93% of the organizations that took this survey were from North America and Europe).

However, it is also worth noting that they are "very involved" in integration consulting services (64%) and business applications (52%). Also of note is the degree of influence EA practitioners have on business intelligence (BI) and workplace tools. As EA practitioners continue to focus on integrating and aligning with business priorities and actively working with business leaders, their degree of influence on BI tools, workplace tools and business applications will likely increase as well.

Figure 3. Degree of Influence of EA Practitioners on IT Budget Activities
Figure 3.Degree of Influence of EA Practitioners on IT Budget Activities

Source: Gartner (December 2012)

These findings are consistent with the fact that we find that 11% of EA practitioners reporting directly to the CIO or CTO had a direct influence on budget decisions (see Figure 4). However, it should also be noted that 17% of EA practitioners reporting to the CIO and 25% of EA practitioners reporting to a VP or director in IT had "no involvement at all" in IT budget decisions.

In inquiries with clients, we often find a spectrum of CIOs, from those focused on business outcomes and on strategic leadership, to those focused on "providing IT as a service" to the business. Technology and service providers will likely find that in organizations where the EA team is reporting to a CIO, who focused on business outcomes, strategy and leadership will have a higher degree of influence than within organizations where the CIO is primarily focused on providing IT as a service to the business. Technology and service providers should look for these types of situations for opportunities to influence EA practitioners.

Figure 4. Degree of Influence by Reporting Structure of EA
Figure 4.Degree of Influence by Reporting Structure of EA

Source: Gartner (December 2012)

We also find that EA practitioners reporting to a CEO, CFO and/or a dual reporting relationship (business and IT) have a strong level of influence over IT budgets and decisions.

Recommendations:

  • Technology and service providers, particularly of emerging technologies, business applications and business integration services, should target EA practitioners with a message of how they can help deliver strategic business value.
  • Technology and service providers should seek out organizations where the EA practitioners are reporting to a senior business executive and/or have a dual business and IT reporting relationship.
  • EA continues to evolve toward a more strategic planning discipline. Technology and service providers should assess the strategic vision and focus of their CIO customers and target EA practitioners in these types of organizations.

Organizations starting, restarting or renewing their EA efforts present an opportunity for technology and service providers to market to and influence a new generation of EA practitioners

In this specific survey, we find that 77% of organizations responded that they were restarting or renewing EA efforts (18%), initiating EA for the first time (34%), or taking EA efforts to the next level (25%). If we look at this data more closely, with respect to the degree of influence of EA practitioners, we find that 19% of EA practitioners working in organizations that restarting EA have decision making authority over IT budget decisions, and 14% have a significant influence (see Figure 5).

Figure 5. Degree of Influence by Stage of EA
Figure 5.Degree of Influence by Stage of EA

Source: Gartner (December 2012)

In organizations starting EA for the first time, EA practitioners have a significant influence on IT budget decisions, but significantly less have decision-making authority. If we look at these organizations starting EA for the first time, with their primary focus for EA, we find 15% focused on delivering strategic business and IT value or enabling major business transformation in 2013. These new and restarting organizations present an opportunity for technology and service providers to target a new generation of EA practitioners.

Recommendations:

  • Technology and service providers must understand what their customers' current and future EA plans are, and have plans for targeting EA practitioners as one of the significant influencers of IT technology and service investment decisions.
  • Focus particularly on the large number of organizations starting, restarting or renewing their EA efforts, with a message of delivering business value and outcomes.
  • Use a business-outcome-driven approach to demonstrate the business value added by your solution.

As organizations become more mature in supporting EA, they will have a greater degree of influence on IT budget allocations to products and services

Many organizations begin their EA journey by focusing inside the IT organization, system consolidation, standardization and cost management. As they mature, this evolves into looking more closely at the alignment between the business strategy and IT strategy. From here, the EA program evolves to become business-outcome-oriented, a key theme as organizations evolve from Level 3: Functioning.

Part of this evolution of the EA program is the widening of the influence to other initiatives within the organization (see Figure 6). Project and portfolio management, governance and IT strategy are key areas to be incorporated early on, and, as Figure 6 shows, almost every area of the IT organization is influenced by the EA program. What this shows is that in a mature EA program other areas of decision making are guided and influenced by business-outcome-driven EA.

Figure 6. Initiatives Integrated Into the EA Program
Figure 6.Initiatives Integrated Into the EA Program

Source: Gartner (December 2012)

This widening of influence as the EA program matures is extended to purchasing decisions with the IT organization (see Figure 7). As organizations reach Level 4: Managed, fully 86% of respondents report themselves to be very involved in purchasing decisions. This is to be expected as organizations use EA to provide a clear line of sight between business strategy and goals and technology decision making.

Figure 7. Degree of Influence by Maturity of EA
Figure 7.Degree of Influence by Maturity of EA

Source: Gartner (December 2012)

Recommendations:

  • Technology and service vendors must recognize that decisions around IT solutions are more credible if they are supported by the EA, and work with the in-house EA team to show how their solution fits into their framework.
  • Make an assessment of the EA maturity of the organization you are working with. Recognize that at Level 3: Functioning and Level 4: Managed, your solution must demonstrate how it supports key business outcomes.
  • Help potential clients evaluate your solution by creating an EA template for your solution that shows generic business outcomes, supported by IT services and down to the application portfolio that potential clients can quickly align to their own EA framework.

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Evidence

1 Gartner's EA Summits in London and the United States, as well as attendees of Gartner's Webinar on EA Best Practices.

Note 1
Methodology

Between May and July 2012, Gartner conducted an EA survey on-site at our annual Enterprise Architecture Summit in North America, as well as a postevent survey (sent as a specialized invitation, with individualized links to all previous attendees of the Gartner EA London Summit), and invitations were sent to several EA webinar attendees during the same time frame.

Attendees/panelists participating in the survey were restricted to end users, in which their organizations currently have an EA program or will be implementing one in the next 12 months. Panelists were directly involved in their organization's EA efforts or extremely knowledgeable about them. Questions focused on organizations' EA maturity, spend, challenges, area of success, business strategy and alignment of EA.

The results of this study are representative of the respondent base and not necessarily the market as a whole. Participants from this study were attendees of the Gartner Enterprise Architecture Summit or participants in the EA webinar; user organizations may have a heightened need for EA. The survey was completed by 134 panelists. The sample consisted of 103 event attendees and 31 webinar attendees.

Note 2
Adjustment to Gartner's Enterprise IT Spend Forecasts

To reach these estimates for the influence of EA practitioners, we reduce the overall enterprise IT spend forecasts ($2.603 trillion) by 15% to account for organizations that do not have nor plan to support EA ($2.212 trillion). This estimate of 15% is based a 2010 survey of 1,209 organizations within Brazil, Chile, China, France, India, U.K. and the U.S. that stated that they do not have and do not plan to have an EA practice.

Note 3
Assumptions Methodology

For these estimates, we assume that (1) the worldwide influence of EA practitioners is approximately the same as in the U.S. and Europe and (2) 85% of organizations support some form of EA, regardless of whether it is a formal program, role or title.