Despite cloud hype, most CIOs still doing IT inhouse

By GovTechReview Staff
Wednesday, 17 April, 2013

For all the discussion about new technologies and the way cloud-delivered services will revolutionise businesses and government agencies, most companies are still pursuing “prosaic” in-house IT strategies, an Ovum government analyst has advised.

Polling of 63 CIOs, all of whom attended Ovum’s recent CIO Strategy Summit, found that 74% of ICT activities are currently provided primarily by an inhouse ICT department. Shared-services arrangements accounted for around 9% of ICT activities, while outsourced arrangements comprised 13% of activities.CC BY-SA 3.0 Jessie Eastland (

Only 4% of ICT activities were being sourced as cloud services – primarily software-as-a-service (SaaS) applications.

The findings were surprising given the level of attention given to cloud services in recent years, but reflect the very different reality that many CIOs are still living every day, Ovum Asia-Pacific IT research director Steve Hodgkinson said in a statement.

“These results reveal a rather prosaic focus on traditional in-house IT operations,” he explained. “ICThe reality for this group of CIOs is that ICT management is still about managing the people, processes, and technologies of the in-house ICT department. It is therefore not surprising that a shortage of people and skills was regarded by CIOs as one of their major challenges.”

There were indications the cloud model will start to ramp up more in the near future, however: outsouring and cloud services were projected to account for one-third of overall ICT activities in the next year or two, while cloud-based data centre and application services will increase to account for more than 15% of the ICT mix within a few years.

To accommodate this change, Hodgkinson recommends that those CIOs still relying primarily on in-house ICT should already be looking for skilled staff to support an expansion of cloud-computing capabilities into the future.

“New mindsets and skills are required, particularly for counterparty risk management and systems integration,” he explained, “and these skills can only be learned with hands-on experience. It’s really all about organisational learning and agile thinking.” – David Braue

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