As Cloud Empowers Lines of Business, Challenges for IT

As the key delivery model for the Internet of Everything (IoE) economy, cloud is helping to drive sweeping changes across nearly all aspects of our lives. But while the growth trajectory of cloud has been carefully charted, there has been comparatively little insight into its impact on IT organizations. To gain a better understanding, Cisco® Consulting Services, in partnership with Intel®, undertook an extensive global survey of 4,226 IT leaders respondents in April-March 2013 to investigate cloud-driven IT change.

“The Impact of Cloud on IT Consumption Models” study explored the dramatic changes affecting IT at all key consumption lifecycle stages — how businesses plan for, procure, deploy, operate, and govern IT. This is part two in a four-part blog series that will explore some of the findings of this study and discuss how today’s IT leaders can prepare for the new model for IT.

One of the clearest expressions of this cloud-driven change is the emergence of lines of business (LOBs) — human resources, sales, R&D, and other areas that are end users of IT — both as direct consumers of third-party cloud-based services, and as ever more prominent influencers of companies’ IT agendas. This represents a major paradigm shift from decades of IT tradition, when IT itself set the agenda and made all planning and procurement decisions.

Seventy-five percent of our respondents believe that IT planning will increasingly involve stakeholders from the lines of business.

The Cisco/Intel study reveals LOBs are funding 44 percent of total IT spending globally, with this figure being more or less consistent across geographies. A majority of our respondents believe that LOBs will maintain or increase this percentage in the next three years. “Rogue” or “shadow” IT spending may imply an even higher percentage of IT spending by LOBs. What is clear, however, is that the emergence of LOBs as buying centers for IT is not a long-term prospect, but a reality.

Moreover, Cisco and Intel’s research demonstrates that LOB impacts extend well beyond who writes the check; they will be felt throughout the IT consumption lifecycle, specifically as a result of cloud. The study reveals two key forces that are driving LOBs to seek more control over their IT experience: 1) business users expect to be able to use a greater variety of devices (82 percent overall), as we have seen with the advent of BYOD in the enterprise; and 2) they increasingly want to access IT services through a “self- service” model (73 percent overall).

Despite the rise of LOB influence, many of our IT respondents — especially those in emerging markets — believe that IT will maintain a centralized and well-funded role, managing cloud solutions with consistent policy and security solutions. (Respondents in Asia Pacific and Latin America are nearly twice as likely to project an increase in the size of their IT organization than their counterparts in Europe and North America.)

Since the influence of LOBs will extend across all IT lifecycle stages, it will create unprecedented complexity for IT organizations as they grapple with a host of issues, spanning security and risk management, support, metrics, and more. As IT transforms to an “as-a- service” model, the interlocks and relationships between IT and LOBs will need to change.

Whether centralization and greater resourcing for IT  is realistic remains to be seen. Regardless, IT will need to partner with LOBs in complex new ways. In the view of the IT leaders surveyed, IT will evolve to be a broker of services to LOBs, acting as an intermediary and orchestrator of internal and external cloud solutions within the business, while also providing technical support and security.

Given the rising influence of LOBs, IT must step up to new challenges: moving rapidly, fostering innovation, enabling new end-user experiences, and positively impacting business outcomes in a measurable way.

Cisco and Intel are committed to guiding customers through every step of this cloud-innovation journey.

To download the full report, please visit: http://www.cisco.com/web/about/ac79/docs/re/IT-Consumption_PoV/

To navigate the report findings by region, please visit: http://share.cisco.com/brightfuture/

For more information on the Internet of Everything, please visit: http://www.internetofeverything.com

For more information on the Cisco cloud strategy, please visit: http://www.cisco.com/go/cloudstrategy

For more information about Intel in cloud computing, please visit: http://www.intel.com/cloud