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Why CIOs Should not be Left in the Dark

David Dariouch, Sales Consulting Director, Systems, Oracle France @DavidDariouch


The CIO must work alongside the CEO and CFO to ensure IT investment supports a unified approach to cloud

Intel

An earlier blog we featured by Marek Swierad highlighted the role the CIO should play in shaping the culture of their organization, acting as a cloud navigator to bring lines of business together so they can focus on the company’s overall mission in the shift to the cloud. To fulfill this role, the CIO needs to have oversight of all the technology used across the business. Their responsibility should be to ensure that every purchase is made within an overall strategy and that technology spending is managed properly.

It’s therefore disappointing to see in our recent report, Putting Cultural Transformation at the Heart of Cloud Success, that this is rare in practice, with 66 percent of CIOs controlling less than half of their company’s IT budget.

 The CIO needs to have oversight of all the technology used across the business. Their responsibility should be to ensure that every purchase is made within an overall strategy and that technology spending is managed properly. 

This situation has come about due to lines of business taking advantage of the simplified purchasing process for cloud, meaning they can buy services without involving IT. They do this in the belief that it saves time and effort when compared to working through the IT department. But they overlook the CIO’s expertise at their peril.

Indeed early cloud investments have shown a pattern of rising integration costs and the creation of data silos because the CIO has not had the opportunity to bring old virtues like enterprise architectures, security considerations and knowledge of the requirements of enterprise grade IT to the table.

 Early cloud investments have shown a pattern of rising integration costs and the creation of data silos because the CIO has not had the opportunity to bring old virtues like enterprise architectures, security considerations and knowledge of the requirements of enterprise grade IT to the table. 

The mix of ‘budget creep’ and ‘function creep’ is something that can arise organically over time if the right checks are not in place. The outcomes are clear enough for anyone to see, and they’re far from ideal.

For example, the IT decision makers we surveyed said line of business managers purchase technology that duplicates existing IT (35 percent), creates security concerns (35 percent), is too expensive (33 percent), or quite simply is the wrong technology choice for the job at hand (30 percent). Shadow IT can also create complexity with data flows according to 32 percent of survey respondents. Given these responses, it’s not surprising that 95 percent of IT departments believe IT investment by lines of business adds complexity to the management of technology.

 Businesses have no hope of implementing an enterprise cloud model successfully, or of getting out of the vicious circle of budget creep and function creep that stand in the way of a unified approach to cloud, if the CIO or CFO remain in the dark. 

This comes at a time when organizations increasingly see the benefits of cloud in their pursuit of an ever more agile, ever more responsive business strategy. This means the adoption of an enterprise cloud model, in which cloud is used across the organization to deliver infrastructure, platform and the IT environment as the most cost efficient and ergonomic way to manage workloads and deliver services.

An enterprise cloud model must be managed by the CIO in collaboration with the CFO and CEO. Ideally this involves running IT as a profit centre, in which budget it allocated to lines of business for specific technology projects and tied to growth and innovation opportunities. In fact, the frustrations that have given rise to shadow IT are often down to outdated funding models, rather than any resistance from the CIO.

Close to a third (31 percent) of businesses said they already taken the profit centre approach, with 74 percent saying their funding model needs to change to deliver greater flexibility.

With an enterprise cloud model in place where the CIO provides the strategic oversight for technology purchases and the CFO holds the purse strings, it is quite simply impossible for shadow IT to exist, nor for lines of business to create data silos that cause such significant problems in many organizations.

Businesses have no hope of implementing an enterprise cloud model successfully, or of getting out of the vicious circle of budget creep and function creep that stand in the way of a unified approach to cloud, if the CIO or CFO remain in the dark. For CIO, CFO and CEO alike, getting out into the light may not be easy – but it is vital for business success, and the implementation of an enterprise cloud model is the ideal way to achieve this in a structured, streamlined way.


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