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A growing divide between IT and business is leading many businesses to take the wrong approach to cloud. While many European companies 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: more than 60% of a company’s overall 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 organizations 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 admit their organizations’ 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

The findings reveal businesses 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 to the business, and 70% expect it will help the company to reduce costs.

Shedding light on 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 (35%) of technology respondents believe Shadow IT practices are inhibiting the ability of IT to deliver on business 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. 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.

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