A Hong Kong survey, “Technology Budgets: Managing Shifting Priorities” revealed that IT budgets are spread across many groups within organisations. This has made it increasingly difficult for IT decision-makers to maintain visibility into where and how their IT budgets are being spent.
Conducted by Censuswide and commissioned by Rackspace Technology, the survey found that 45% of local IT decision-makers lack a basic understanding of what cloud cost governance and cloud cost optimisation are, and how they are different.
Businesses in this category are at risk of cloud sprawl.
Across the board, local leaders recognise the value in investing, tracking, and managing IT spend but finding someone with the expertise to do this effectively is a challenge.
While all of IT decision-makers surveyed reported having a documented IT budget and dedicated resources to manage IT spend, and yet over half (56%) those surveyed do not feel these resources are skilled enough to be effective.
The COVID-19 effect
COVID-19 has taken an already difficult task and increased the complexity significantly, with local respondents reporting the need to address a wide array of new technology challenges.
95% of decision-makers reported new concerns around budget or costs in the last three months, with 37% reporting concern over being unable to fund planned projects.
Also, businesses reported a 45% increase in spend on technologies to support remote working (Virtual Desktop Infrastructure (VDI), productivity, video conferencing/collaboration, etc.). This forced shifting budget away from planned initiatives and toward obtaining the technology necessary to keep the business running.
As different business units seek to quickly adopt tools to maintain business continuity, the investment in other IT priorities can get lost in the shuffle and go untraced.
“Many businesses have found out the hard way in 2020 that their IT systems, resources and spend tracking weren’t ready for COVID,” said Jeff DeVerter, chief technology officer – Solutions at Rackspace Technology.
“With a 45% increase in spend on IT tools, businesses have been forced to adapt quickly to a changing environment which is why we designed the Cloud Optimisation solution, to provide customers with an end-to-end solution to help them optimise their cloud workloads for cost and performance.”
A cloudy option
“The largest challenges organisations are facing during the Covid-19 situation and in implementing work-from-home initiatives are associated with how prepared they are in adopting a cloud-first strategy,” said Sandeep Bhargava, Managing Director of APJ at Rackspace Technology
He opined that a pay-as-you-go model lets local organisations leverage the power and performance of enterprise-grade IT infrastructure without having to incur the capital expenditure of managing and maintaining their own hardware.
“A cloud-first strategy has become the foundation that enables businesses to transform, differentiate and gain competitive advantage,” said Bhargava.
This means organisations are not optimizing their cloud assets. This can potentially lead to overspending by as much as 42%, according to data compiled by Densify.