IT Utility model to challenge CIO's - IDC
IT Utility model to challenge CIO's - IDC
Developing a satisfactory customer/supplier relationship and giving up control of assets under management are set to be the main challenges that CIO's will have to overcome in order to adopt an IT utility model.
That is according to IDC's latest ITEyewitness report, entitled "Lowering the cost of connecting your business."
The study was conducted as part of IDC's global end-user research to understand what alternate forms of sourcing today's organisations are considering to minimise capital expenditure required for IT agility.
The utility model promises to improve operational efficiency, quality of service and the ability to respond quickly to changing demands. Although the concept of computing on demand is already accepted by many, the study reveals that getting to the point where computing resources are always available when needed, where needed and with as much capacity and capability as needed is still a big challenge.
The report also reveals the IT Utility Model cannot be adopted based on costs alone; it must be considered in the context of business drivers such as: business model innovation; process superiority; and cost/performance improvement.
IDCs research suggests that worldwide IT spending will continue to grow to almost US$1 trillion, into spending segments: 46 percent routine infrastructure, 28 percent ongoing initiatives, and 26 percent on new initiatives. The report found that there are different business drivers behind this growth in spending and that more than one approach to evaluating IT investments is needed. This report reveals the benefits offered by the IT Utility Model, the challenges it poses for overall IT/business operating models, future outlook and actions for success.
This study also revealed the IT Utility is considered by many to be the way of the future. IDC considers the provisioning of computing capacity as a utility to be the next stage in the evolution of traditional IT outsourcing and managed services.
Organisations need to consider all critical solution elements: people, processes, technology and financial justification that could inhibit and/or enable adoption of the IT Utility Model.
The challenges for CIO's adopting the IT Utility Model will be ensuring resources are always available when needed, where needed, and with as much capacity as needed. However, giving up control of assets under management may prove to be the biggest challenge for CIO's.
Related Article: