A global study of senior executives’ experiences with cloud computing has found that most businesses have evolved past seeing it as simply a cost reduction strategy, however many have found cloud more difficult to implement than they first imagined.
The KPMG report “the cloud takes shape,” surveyed more than 650 senior execs across 16 countries about their initial experiences of adopting cloud computing strategies, and found that it hadn’t been smooth sailing for many. However most seemed to think that long term benefits would outweigh shorter term challenges.
Approximately one third of executives surveyed reported that integrating cloud services with their existing IT infrastructure was more difficult than expected, which had lead to higher than expected implementation costs. In addition 30 per cent said privacy risks and data loss had been an issue, with other concerns raised including the risk of intellectual property theft, interoperability problems between cloud service providers and concerns about complying to legal and regulatory requirements.
The survey found that human resources departments were the most likely parts of a business to be already using cloud computing services, with IT management and sales and marketing also strong adopters.
It said it was worth noting that concerns related to security did not seem to be slowing cloud adoption. In fact, more than a third of respondents suggested their organisations would adopt cloud within the next 18 months in areas such as sourcing and procurement; supply chain and logistics; finance, accounting and financial management; business intelligence and analytics; and even tax.
”Clearly, this indicates that organisations continue to move more core and sensitive data and processes to the cloud, despite ongoing security concerns,” the report found.
Speaking about the findings of the report, IT director at listed financial services firm AMP, Craig Ryman said the organisation had realised that it needed to evolve its cloud computing plans away from just focusing on cost savings.
“AMP recognises there is value moving to the cloud. It is a potential game changer in many ways, but it is critical that we realise maximum value from our investment,” Mr Ryman said.
“Beyond a focus on costs, we’ve deliberately taken a strategic, ‘whole of portfolio’ approach, recognising that changes to our operating model will be required to achieve our long term growth objectives.”
KPMG Australia’s national head of infrastructure and architecture, Jonathan Taylor, said the research showed that businesses needed to approach changes to their IT operating model alongside changes to their broader business processes.
“Gaining real cost savings from the cloud is about more than simply moving from fixed costs to operating costs; the greatest cost savings, and more importantly, the transformational business benefits – will come from the longer-term outcomes such as more efficient processes, more flexible operating models,” Mr Taylor said.
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