Putting cloud services on the company credit card is undermining attempts to plan. What can be done to solve this?
The use of cloud-based applications is popular among business units due to their ease of use and availability, but all too often their adoption is never reported back to IT to allow proper planning and investment.
According to the Cloud Industry Forum’s survey of 250 IT decision-makers in the UK, over four in five UK organisations have formally adopted at least one cloud service. Analyst firm Gartner found that in 2016, just 17 per cent of IT spending [was] controlled outside of the IT organisation.
Not only does unsanctioned business unit cloud adoption mean a loosening of grip on IT spending for the CIO, it can also be a security issue as well. A data breach from an individual business unit may result in financial penalties that hit an organisation’s bottom line.
Even without the significant upset of a security breach, the use of cloud services without proper management still means a lack of financial visibility for the CIO. Increasingly, the CFO works in association with the CIO to plan an organisation’s future spend. This is because the CIO needs to plan ahead to determine which investments are needed by the company and how much they will cost. They also need to ensure the firm invests wisely and gains business value from longstanding investments.
Not knowing what a business unit is spending on cloud services creates a disruption gap where the CIO has a critical lack of visibility into these investments. This means there is a real chance that poor visibility can lead to overspending on cloud services, whether that is duplication, not getting the best deal on cloud services spending, or ending up with a SaaS application that no-one uses.
So, how can organisations better deal with cloud services procured by other business units?
IT procurement is often bypassed when business units purchase subscriptions below an authorisation threshold via an online portal or app store. These costs can rapidly mount up, if the CIO is not aware of them and they cannot turn to license optimisation to streamline costs.
In order to gain insight into this spending, shadow IT discovery tools can be deployed that automatically scan the organisation network infrastructure to detect cloud services.
These multiple platform auto discovery tools extend from the cloud and datacentre right down into the mobile device. This should get the CIO the full extent of cloud consumption as part of a great software asset management (SAM) strategy.
With this visibility comes more influence over the software decisions that other business units take when it comes to provisioning IT and cloud services. While CIOs can’t turn back the clock on shadow IT, at least knowing about it gives the CIO the ability to mitigate financial liabilities and act as a trusted advisor to the rest of the business when it comes to the provision of cloud services.
Having awareness of what is being used within the infrastructure and how much is being spent gives the CIO power to influence or control how software and cloud services are being consumed. Having such influence can drive substantial savings, boost efficiency and mitigate security risks.
With a good software asset management solution in hand, the CIO can be the person other business units turn to get the best deal on cloud services from vendors as they will know from the CIO which other parts of the business use the same services.
With digital transformation likely to turn every business unit leader into a “mini-CIO”, having insight into what cloud services are being used where can help in bridging the disruption gap this transformation is causing. Furthermore, it will also aid the CIO in maintaining relevancy in today’s modern organisation.
Looking to bridge the disruption gap caused by digital transformation? Learn how Snow and Crayon are empowering CIOs and IT leaders to regain control, reduce overspend and influence key IT investment decisions: