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The rising adoption of cloud services is fundamentally changing how British businesses consume IT, according to a new report produced by Cisco Consulting Services, in conjunction with Intel®. The report found that in a majority of organisations, control of IT planning and purchasing is increasingly being shifted to lines of business (LOBs) such as HR, sales, and R&D. Their rising influence represents a marked departure from the traditional “top-down” approach, forcing IT departments to adapt.
“The Impact of Cloud on IT Consumption Models” report – based on a global survey of over 4,000 IT decision makers – suggests the United Kingdom is at a tipping point in IT spending as cloud uptake increases. While 43 per cent of funding currently comes from LOBs, 59 per cent of respondents predict that this will rise. As a proportion, the cloud represents almost a quarter of total IT spend (23 per cent), with that figure expected to rise to 27 per cent by 2016.
Given that 70 per cent of respondents believe IT planning will increasingly involve stakeholders from LOBs, and 59 per cent believe purchasing authority will also eventually reside with LOBs, the role of the IT department looks set to change. While they may once have planned, purchased, and implemented entire projects, 70 per cent of U.K. respondents believe that in the future, they will serve as “brokers” of services. With this new role comes new challenges: 77 per cent of respondents said integrating cloud services with in-house IT systems is now their main concern.
The research identified two key drivers of this push for greater control among LOBs:
1. The popularity of bring-your-own-device (BYOD) schemes – 82 per cent of respondents expect to be able to use an increasing number and variety of devices.
2. IT as a service — 72 per cent increasingly expect to access IT through a “self-service” model, supporting the general trend towards delivery of IT as a service.
The principle of a self-service approach is that LOBs will always have a number of different options for their IT services, meaning IT departments effectively have to compete with third-party suppliers, outsourcers, and vendors in order to “win” these internal customers. Evidence of IT departments losing out to competition is already apparent: almost half (49 per cent) of U.K. respondents have seen an increase in “rogue purchasing” by LOBs over the past two years – higher than both the European and North American averages.
“2014 looks to be the year that LOBs overtake IT departments in terms of spending. Almost every conceivable business function can now be delivered from the cloud as a service, empowering departments to seize control of their own spending instead of waiting for a nod from IT,” said Jo Laking, UKI cloud leader, Cisco.
“As we move forward, IT teams must be able to translate internal teams’ business requirements into appropriate technical solutions, and then integrate these private/public offerings securely and efficiently with existing infrastructure. Furthermore, we’ll soon see the influence of LOBs extend beyond merely planning and purchasing. As their share of funding increases, LOBs will begin to play a much more active role in the operation and governance of these internal systems, meaning it will be impossible for IT for survive without learning to collaborate.”
