Nearly half of businesses are struggling to embrace the move to the cloud due to increasing integration costs and “inappropriate” IT funding models.
That’s according to new research published by Oracle, which commissioned research agency Coleman Parkes to survey 600 senior IT and business decision makers across Europe and the Middle East to establish how cloud adoption can be increased in businesses.
It said a key reason behind businesses struggling is that more than 60% of a company’s overall IT spend was found to be being driven by individual business units as opposed to traditional IT departments.
This makes it difficult for companies to fully benefit from the cloud services they are subscribing to, Oracle said.
The report – Putting Cultural Transformation at the Heart of Cloud Success – claims another “significant part of the problem” is that most organisations continue to fund their IT investments without aligning them to revenue potential and innovative projects.
Some two in three respondents said IT funding is “too traditional” and is “stifling innovation”, while one in three admitted their organisations’ IT funding models are hindering them from IT innovations.
One third (33%) of respondents said an inappropriate IT funding model is inhibiting their business, while the same number of people also believe their company’s IT culture is “unfit” for the cloud computing age.
Some 72% said a new cloud funding model would allow IT departments to deliver more cloud services to the business, and 70% said they expect it would help the company reduce costs.
The 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 (35%) of technology respondents believe Shadow IT practices are inhibiting the ability of IT to deliver on business goals.
A further 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 – where data remains under the control of one department and remains isolation from the rest of the company,
Additionally, the vast majority of respondents (95%) believe Shadow IT is a major cause of complexity – one-third said 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.
Johan Doruiter, senior vice president of systems at 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 synchronisation 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.”