UK C-level executives understand the benefits of the cloud, so what’s holding them back?
It’s easy to feel safe with what you know, and when it comes to enterprise technology, that often means your current setup, no matter how antiquated it is. Even though today’s boards understand the cloud’s potential for their organisation, many are still not using it at a strategic level. And just as often, the financial team are finding it hard to justify without having the right insights presented to them
For the CFO, the challenge is to think of new ways to use technology in the business that helps deliver the strategic objective of the company but at an acceptable cost. And this often means grappling with existing legacy ICT estates and not putting forward the funding needed to mature ICT services to the business. CIOs recognise that cloud computing could provide some of the answers.
Recently the UK Government announced plans for its Information Economy Strategy and its desire for the “UK to be a global leader, excelling in cutting edge technologies like Big Data, Cloud Computing and Cyber Security”. This, along with the G-Cloud programme and its recent investment of £440 million through the Technology Strategy Board (TSB) is intended to help drive business innovation and the importance of commercial growth to the wider political and business agenda.
Findings from a new independent report commissioned by NTT Europe suggest that these investments may be significantly held up unless some basic issues are tackled first. The report, Growing pains in the cloud, found that four in five (81%) of the CIO’s interviewed said that the complexities of their existing ICT infrastructure were holding them from adopting cloud computing solutions.
Forbes recently cited that businesses are now facing an 80/20 budget split, meaning 80% of ICT budgets are devoted to run and maintain incumbent systems, leaving just 20% for innovation. It is clear that executives recognise the importance of cloud computing which is genuinely dominating boardroom planning, according to a KPMG report. However there is still a lack of understanding around the complexity of legacy ICT estates and how this is hindering wider business innovation. CFOs and boards need to look for ways to step forward and address this imbalance. By implementing the right ICT solutions, this will support expansion into new markets, offer advanced security and provide intelligent data to help business growth.
Resolving legacy ICT issues is an understandably daunting task, but businesses need to stop thinking about whether they should address these issues and instead decide how and when. Moving infrastructure and applications to the cloud is clearly not going to happen in one easy step and can differ greatly depending on the size of a business, but some providers are ready and want to help. For many businesses combining remote infrastructure management with cloud computing to form hybrid architecture will be the most effective.
It’s easy to underestimate what an essential role the CFO plays in this process too. When it comes to the bottom line, the smart CIO will work closely with their counterpart and the board to prove the financial argument for these developments. With the right background knowledge, it’s easy to work toward a position of confidence in such discussions. Ultimately, it comes down to the business case fitting the requirements of the organisation and understanding that moving to the cloud is not a slap dash job. However, once the business case has been accepted by the organisation’s executives, the move to cloud is a much more compelling proposition.
The stage is set and the ease with which companies can embrace the opportunity is greater than ever.
Bob Welton, Regional Director Northern Europe, NTT Communications in Europe