While many European organisations are embracing the move to the cloud, nearly half are struggling, wrestling with increases in Cloud integration costs and data silos according to a new study sponsored by Oracle.
A key reason for this, the company says, is that more than 60% of an organisation’s overall IT spend is being driven by individual business units versus traditional IT departments, making it difficult to fully benefit from the cloud services they are subscribing to.
Another significant part of the problem is that most organisations continue to fund their IT investments without aligning to revenue potential and innovative projects: two in three business decision makers said IT funding is too traditional and is stifling innovation, while one in three IT-decision makers revealed their IT funding models are hindering them from IT innovation, according to Oracle’s Putting Cultural Transformation at the Heart of Cloud Success report.
For the research, Oracle partnered with Coleman Parkes to survey 600 senior IT and line of business decision makers across Europe and the Middle East.
Time to change funding models
Organisations must rethink their IT funding models and undergo a cultural transformation in order to fully exploit the benefits of cloud computing. One third (33%) of respondents say an inappropriate IT funding model is inhibiting their business. One third (33%) also believe their company’s IT culture is unfit for the cloud computing age.
Tellingly, 72% of respondents say a new cloud funding model will allow IT departments to deliver more cloud services, and 70% expect it will help to reduce costs.
Shedding light on shadow IT
Increased IT spend outside the IT team (also known as shadow IT) is standing in the way of progress. More than one third (35%) of technology respondents believe shadow IT practices are inhibiting the ability of IT to deliver goals. Indeed, 46% said the approach they’ve taken to cloud so far has increased integration costs, with the same percentage saying it has led to the creation of data siloes. Additionally, the vast majority of respondents (95%) believe Shadow IT is a major cause of complexity.
Johan Doruiter, senior vice president of systems, Oracle EMEA, said: “The issues companies face with their cloud resources are less to do with the technology itself and more to do with a lack of synchronization across lines of business. Decision-makers in each department are increasingly making cloud purchasing decisions without involving the CIO due to the ease of procurement. However, without one IT point-person to unify their cloud investment strategy companies will continue to struggle with individual departments tugging time and resource in opposing directions.”
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