Cloud research exposes gaps between CIOs and business leaders

Cloud research exposes gaps between CIOs and business leaders

Summary: New research on cloud adoption brings forth significant perception gaps between business executives and IT leadership.

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We often hear that IT is not aligned with the business, which is a catchall concept loosely meaning that business leaders and IT folks do not understand each other's goals. 

Cloud research exposes gaps between CIO and business leaders
Portrait of a CIO who can't believe this is happening. (Credit: Michael Krigsman)

Although differences in perspective and goals between these groups do exist, the gaps are difficult to measure, quantify, or even describe precisely. Nonetheless, these differences in goals and expectations are real.

Read more posts from the Beyond IT Failures blog

A recent survey on cloud adoption presents an interesting view of the perception gap between IT and business executives. Although the survey focuses on issues such as on-premise upgrades and availability of technical resources, the best stuff is buried in a single graphic.

Enterprise performance management vendor Host Analytics sponsored a survey (PDF download), by Dimensional Research, that describes certain drivers of cloud adoption.

Although off-center from the survey's primary intent, the following graphic provides a rich source of important data on IT/business alignment in relation to the cloud:

Cloud research Big gaps between CIO and business leaders
(Credit: Host Analytics)

Let's parse this chart, starting from the top:

  • The cloud solution better met our compliance requirements--business: 14 percent; CIOs: 58 percent. Ostensibly, the data suggests that CIOs think the cloud can help with compliance while business people don't see an advantage. However, it's also possible that the business people don't really understand what the compliance requirements actually are, in which case, the question itself is largely irrelevant to the business side

  • The cloud alternative delivered better value--business: 80 percent; CIOs: 53 percent. Although the phrase "better value" is vague, most likely business people interpret this to mean "less expensive". This makes sense because many business folks see cloud as a means to bypass IT and purchase computing at lower cost. On the other hand, the data indicates that CIOs recognize that software alone is only part of the overall cost equation for enterprise technology

  • The cloud solution offered greater competitive advantage--business: 13 percent; CIOs: 51 percent. This one is kind of sad--in effect, business people see the cloud as offering little more than cheap software with no competitive advantage. On the positive side, 51 percent of the CIOs surveyed recognize that cloud offers benefits beyond moving servers out of closets down the hall

  • We choose cloud applications whenever possible as part of our cloud strategy--business: 14 percent; CIOs: 42 percent. Once again, the differences between business and IT are striking. Most likely, business respondents have no articulated cloud strategy, and buy whatever solution is cheapest and gets the job done in the very short term. CIOs, however, often have a strategy intended to embrace the cloud cautiously over time

  • We had no requirement for cloud or on-premise, but the cloud solution we chose met our requirements better--business: 12 percent; CIOs 35 percent. The response suggests that the enterprise line of business-buyers purchase cloud products despite believing that the products have shortcomings. Since many of these buyers are abandoning highly-tailored and feature-rich enterprise solutions, this viewpoint makes sense. In other words, business executives are willing to trade off features and business fit for lower cost. The CIOs possess a broader set of requirements, including labor and cost efficiencies, which explains their greater overall satisfaction with cloud solutions.

Advice for CIOs

The survey highlights several important points for CIOs to consider, including:

        1. Business buyers don't care about your IT agenda: As CIO, your technology focus includes a broad range of considerations that are of little direct interest to business executives. Most business folks don't care about your infrastructure, staffing, and efficiency concerns. They want feature rich applications that meet their specific needs. And, they want those apps cheap.

        2. Business buyers have a tactical view of technology procurement: Their concerns focus narrowly on solving specific problems, perhaps without a long-term or strategic view of technology. The clear implication: address their specific needs without adding your back office constraints heavily to the mix. Find a way to handle your own constraints without binding users into solutions that do not accomplish their goals.

        3. Users need education on strategic cloud benefits: Based on the survey, we can conclude that users do not understand that cloud benefits go far beyond lower cost. Both IT departments and software vendors must do a better job educating users on the innovation and business process benefits of the cloud. And, dear CIO, I must delicately note that your staff may also need additional education in this area.

The bottom line

Despite the growth of cloud, large gaps exist between user and IT expectations. Since the focus is technology, it is incumbent on CIOs and vendors to help educate these business users. The survey sends a clear warning to every CIO: evaluate the degree to which your users understand the strategic benefits of technology, especially on complex and important issues, such as cloud. Failure to do so will perpetuate user perceptions of IT as a cost center and contribute to decline in IT value.

Also read:

Update 1/22/13: Consultant, Carlos Francavilla, has translated this article into Spanish and added his own commentary.

Topics: Cloud, CXO, Enterprise Software, NextGen CIO, Social Enterprise

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7 comments
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  • Cloud is not about saving money

    I think there should be more focus from IT departments and the media on the real benefits of cloud computing. Too much focus is being placed on the fact that it will be cheaper, and that have business consumer jumping on the band wagon, when in fact it is not neccessarily going to be cheaper. To have a cost saving would depend on your implementation.

    What cloud computing does provide though is a more agile environment, better compliance, better growth, an easier way to manage your DR environment, etc etc. Until business realise that there is more to cloud computing than just saving money it will not achieve what it is meant to achieve.
    nicopretorius
  • IT

    The consensus seems be show that cloud solutions are preferred because they are less expensive, not because they are a better or as good a fit. The differing viewpoints is that CIOs see more value in Cloud than the business.

    I don’t see this difference of view as lack of alignment, but rather the impact of shrinking IT budgets. As IT budgets shrink and the demand stays the same or increases, CIOs look to stretch budgets. So, IT is getting value, but what about the business? Decisions on solutions should be driven by how well a solution improves the way work gets done, that creates significant value for the business, informed by the total cost needed to deliver those improvements.

    The risk I see, is after a few years when the aggregate cost of a cloud solution will match or pass the amortized cost of a non-cloud solution, cloud solutions will be evaluated based on their ability to enable improvements that create real value for the business--- i.e. the fit.

    Company leadership also needs to ask the question: to what degree do you create a competitive advantage if your competition is adopting the same software-driven improvements?
    elizab
  • A Portrait of Loverock Davidson who can't believe all this is happening

    to his Surface. He can't get his badly needed updates, he can't stop the flashing tiles in Metro.....he's a complete mess and he really does look said in that picture.............pick up your shield and sword, get a stern look on your face and be ready to defend Surfacce..................
    Over and Out
    • Is your world

      Is your world so small you need Loverrock this badly? The guy isn't even here and you are off on a silly rant for no reason. Can you say obsessed? (Stalker?)
      NoAxToGrind
  • The problem is the same that it's always been

    The disconnect between business managers and IT has always that it's difficult to quantify the benefit of IT. If a manager repalces a perons across three factory shifts (3 people) with a robot or other automation the "benefit" is easily seen and measured. However changing a business process (say accounting) is done or what hardare/location doesn't lend itself to easily being quantified.

    The second big disconnect is the "next big thing" sales tactic of IT departments and managers. When an IT guy is trying to push a new tech. (in this case the cloud) the buniness managers remember the last year, and the year before, and the year before when they were told the same line and bought into it and are still waiting to see the ROI from jumping on those band wagons.

    I look at the numbers in the graph and they were fairly predictable because they are close to the same results when surveys have been done of the same two groups in the past and major changes to IT.

    In other words, the more things change the more they stay the same...
    NoAxToGrind
  • Not sure I agree . . .

    "Let's parse this chart, starting from the top:"

    Let's fix that:

    'Let's reinterpret the chart with our own personal beliefs that cloud is always better no matter what and how dare anybody say otherwise, for they are all heathens:'

    Fixed.

    "Business buyers have a tactical view of technology procurement: Their concerns focus narrowly on solving specific problems, perhaps without a long-term or strategic view of technology."

    Not sure I agree. They do have long term goals - in their business. An auto manufacturer makes cars and trucks. Their long term thinking is dedicated to that. I'm not sure they really want to spend a lot of time thinking about the software that is running on their workstations.
    CobraA1
  • cloud gazing ... do you see a bunny, better compliance, or lower spend?

    Nice insight into perceptions, Michael. Some service changes at Amazon are going to bring hosting prices down a lot, even for systems with massive traffic or rich features – if the systems are architected to take advantage. Will be interesting to see if this gets business and CIOs both what they want – greater compliance, flexibility; better user experiences. More sales, maybe, when that’s the goal. All for lower costs. But as nicopretorius pointed out – the trick is in the implementation.
    Ned Boyajian