40pc of C-suite executives plan to block cloud computing

19 Jan 2011

Forty per cent of C-level executives have stated they are not planning to adopt cloud computing, according to a global report by the non-profit IT Governance Institute.

Senior executives who do not plan to use cloud computing at all in the near future list security (47pc) and privacy concerns (50pc), followed closely by legacy infrastructure investments (35pc), as barriers to adoption.

The 2011 study polled 834 executives from 21 countries, divided almost evenly between business executives (CEOs, CFOs and COOs) and IT executives (CIOs and heads of IT).

Of the executives who use or plan to use cloud computing for IT services, 60pc was non-mission critical and 40pc would also trust the cloud for mission-critical IT services. Organisations are also actively employing outsourcing, with 93pc fully or partially outsourcing some of their IT activities.

“Emerging technologies, such as cloud computing and outsourcing, can be managed effectively by integrating good governance over IT,” said Ken Vander Wal, international vice-president. “Organisations need to adopt new service delivery models to stay competitive, and this is fuelling a strong commitment to enterprise IT governance across the C-suite.”

“Assessing the value of current investments, building consensus among stakeholders and mitigating risk with third-party providers all require a comprehensive governance framework for organisations to be sure they are doing the right things and doing things right.”

Of the C-level executives surveyed, 95pc consider governance of enterprise IT important. This reveals an almost universally shared perception of IT as a critical contributor to overall business strategy, no matter where the organisation is on the path of GEIT maturity.

Divide between IT and boardroom still an issue

Value creation of IT investments is one of the most important dimensions of IT’s contribution to the business (mentioned by more than nine out of 10 respondents). But challenges exist: increasing IT costs and an insufficient number of IT staff are the most common IT-related issues experienced by respondents in the past 12 months.

There is a correlation between the position of the head of IT in the enterprise’s hierarchy and the pro-active nature of the IT department. Overall, 70pc of respondents noted that the head of IT is a member of the senior management team, but this figure increases to 80pc for those enterprises where IT has a proactive role.

Governance of enterprise IT (GEIT) is a priority with most enterprises – only 5pc indicated they do not consider it important. Two-thirds of respondent enterprises have some GEIT activities in place, the most common being the use of IT policies and standards, followed by the employment of defined and managed IT processes.

The main driver for activities related to GEIT is ensuring that IT functionality aligns with business needs, and the most commonly experienced outcomes are improvements in management of IT-related risk and communication and relationships between business and IT.

Outsourcing is highly prevalent across the board, but especially in larger enterprises and those where IT is considered important or very important to the delivery of the business strategy or vision.

Impact of global downturn on IT activities

The global economic downturn has had an effect on IT activities, the primary response initiatives being a reduction in contractor staff, a reduction in permanent staff and a consolidation of the infrastructure.

The use of Facebook or Twitter at work is not highly prized; only one out of five respondents believes the benefits of employees using social networking outweigh the risks.

“The overwhelming consensus about the importance of IT governance is encouraging,” said Roger Southgate, past president of ISACA London and independent governance and risk consultant.

“As 2011 IT initiatives get under way against an economic backdrop that continues to be volatile, the ability to balance and manage value creation, risk management and optimisation of resources will be critical.”

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years