The Oracle’s new pan-Europe, Middle East and Africa (pan-EMEA) study has revealed that while many EMEA companies are embracing the move to the Cloud, nearly half are struggling with increases in cloud integration costs and data silos.
The key reason, according to the report that was released recently by Oracle, more than 60 per cent of a company’s overall Information Technology (IT) spend is being driven by individual business units versus traditional IT departments, making it difficult for companies 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, as two in three business decision makers said IT funding is too traditional and is stifling innovation, while one in three IT-decision makers admit their organisations’ IT funding models are hindering them from IT innovation.
The study, tagged ‘Oracle’s Putting Cultural Transformation at the Heart of Cloud Success,’ saw Oracle partnering Coleman Parkes to survey 600 senior IT and line of business decision makers across Europe and the Middle East and Africa.
The findings revealed that businesses must rethink their IT funding models and undergo a cultural transformation in order to fully exploit the benefits of cloud computing. One third, which is about 33 per cent of respondents, said an inappropriate IT funding model is inhibiting their business. 33 per cent also believed their company’s IT culture is unfit for the cloud computing age.
Another 72 per cent of respondents said a new cloud funding model would allow IT departments to deliver more cloud services to the business, and 70 per cent expect it would help the company to reduce costs.
In the area of shadow IT, the Oracle study also found that increased IT spend outside the IT team, also known as Shadow IT, is standing in the business’ way. More than one third, about 35 per cent of technology respondents believed that Shadow IT practices were inhibiting the ability of IT to deliver on business goals. Indeed, 46 per cent said the approach they have taken to cloud so far has increased integration costs, with the same percentage saying it has led to the creation of data silos.
However, the vast majority of respondents, about 95 per cent believed Shadow IT is a major cause of complexity. Roughly one-third say leaving lines of business to manage their IT-spend independently results in increased security concerns, making funding more difficult to manage, and diluting the company’s control of its IT.
Senior Vice President of Systems, Oracle EMEA, Johan Doruiter, 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 synchronisation across lines of business. Decision-makers in each department are increasingly making cloud purchasing decisions without involving the chief information officer of the company, 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.”
The Oracle’s research also revealed that in many companies there is no single person with a view across all technology investments, and this makes it difficult for organisations to develop and follow a unified cloud strategy.
The report said the chief information officer of a technology company cannot continue to be side-tracked and advised that such staff must be an integral player in leading the business as it transitions to an enterprise cloud model. With integration and data management still critical to organisations, alarmingly, chief information officers control less than half the IT budget in 66 per cent of businesses, the report said.
Doruiter added: “Companies are having their expectations met by the cloud in many respects, but their approach to IT investment remains stuck in the past. The cloud is about seamlessly joining up data and workloads across the organisation and yet we continue to see individual lines of business implement IT systems in silos. This breeds added complexity and leads to integration issues that could easily be avoided with a more integrated approach.”