IT departments losing control through cloud services say Cisco and Intel

IT departments losing control through cloud services say Cisco and Intel

Functions outside IT are likely to be spending more than the IT department on cloud this year

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The cloud offers senior executives the business control they demand, according to international research from Cisco and Intel, meaning IT departments need to "become more collaborative and innovative as result".

The rising adoption of cloud services is "fundamentally changing" how businesses consume IT, according to the Cisco Consulting Services report, 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", Cisco says.

“The Impact of Cloud on IT Consumption Models” report – based on a global survey of over 4,000 IT decision makers – found that while 43 percent of funding currently comes from LOBs, 59 percent of respondents predict this will rise.

As a proportion, the cloud represents almost a quarter of total IT spend (23 percent), with that figure expected to rise to 27 percent by 2016.

Given that 70 percent of respondents believe IT planning will increasingly involve stakeholders from LOBs, and 59 percent 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 percent of UK respondents believe that in the future, IT departments will serve as “brokers” of services.

The research identified two key drivers for this push for greater control among LOBs, including the popularity of bring-your-own-device (BYOD) schemes - 82 percent of respondents expect to be able to use an increasing number and variety of devices.

Another main driver was IT as a service - with 72 percent increasingly expecting 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, with almost half (49 percent) of UK respondents having seen an increase in “rogue purchasing” by LOBs over the past two years – higher than both the European and North American averages.

Jo Laking, UK & Ireland cloud leader at Cisco, said: “This year 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.”

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