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Cloud Cost Control, Technical Debt Management Top Priorities for CIOs

CIOs are looking to reduce technical debt and increase investment in cloud computing, despite being under pressure to stretch IT budgets, a SoftwareOne survey finds.

Chief information officers are looking to rein in technical debt and expand investment in cloud computing even as they're expected to further stretch IT budgets, with 83% of CIOs under pressure to make their budgets go farther than before.

These were the results of a SoftwareOne survey of 600 C-suite and IT decision-makers, which also revealed that 92% of CIOs are expected to deliver revenue-generating digital transformation initiatives this year.

However, cloud migrations rushed during the COVID-19 pandemic are a major stumbling block (cited by 38% of survey respondents), with the failure to optimize workloads prior to transition raising challenges for nearly a third of those surveyed.

Miscalculations and the complexity of cloud budgets are adding to CIO woes, while more than half (51%) of survey respondents admitted that legacy IT is one of the top three challenges they currently face.

Few Organizations Are Reaching Their Full Cloud Potential

The biggest surprise in the report was that out of almost all the organizations surveyed (all utilizing the cloud), only 27% said they were greatly exceeding the value they expected from their cloud investments, Craig Thomson, senior vice president of cloud and application services at SoftwareOne, said.

"Businesses are pouring thousands upon thousands of dollars into the cloud, but less than a third are reaching their full cloud potential. That's astounding," he said. "We all know tech stacks and cloud spend can be tricky to wrangle in, but I was expecting a larger percentage of organizations to have put forth a significant effort to get the most out of their cloud usage."

"It's important for companies to establish true baselines of their current environments and spend, including likely significant shadow IT spending," Thomson said. "The main thing to recognize is that technology, and especially cloud, has a direct impact on the business and all the functions of the organization."

Getting a holistic program in place to establish and maintain strong governance but to also partnership in business outcomes is often a big challenge, he said.

Thomson pulled quote

By implementing FinOps best practices including cost allocations, chargeback/showback, reservation/savings plans, and organizational change management, business leaders can make smarter decisions based on the value of a workload or business unit.

"With greater visibility and clarity, businesses are able to significantly increase the value of their cloud investment," Thomson said.

How to Handle Technical Debt

When it comes to technical debt, Thomson said the biggest key is assessing where the debt exists and which parts of the business are connected to it, or dependent on it.

"When we look at where it exists in infrastructure, it's generally solvable through migration and optimization, but at the application or security levels, it often has reliance on dependency mapping across their app, data, and infrastructure layers," Thomson explained.

Organizations must understand fully what parts of their business depend on legacy applications and processes, understanding the impact of those outcomes, and make educated decisions to either cut over to new (new app development in cloud-native) or transition (perhaps via presentation layer) to a completely rearchitected platform.

"Generally, there are ways to offset investment costs with cost savings built into the transformation," Thomson said. "There is also a cultural change in refocusing on helping the organization build toward the future models and keep an overall governance included in their processes."

One of the most significant trends is organizations having success in driving digital transformation by ensuring they have a strong baseline to build from, he added.

"To rethink the strategy, they need good data around where they really are versus where the business is projecting that they need to be," he explained.

Best practices can include a robust technical debt assessment; full assessment of the spend, licensing, and cloud strategy; and prioritizing where the most ROI exists in that journey.

"This is typically where a healthy FinOps program can really begin to drive value into the organization as well," Thomson noted.

About the author

Nathan Eddy headshotNathan Eddy is a freelance writer for ITPro Today. He has written for Popular Mechanics, Sales & Marketing Management Magazine, FierceMarkets, and CRN, among others. In 2012 he made his first documentary film, The Absent Column. He currently lives in Berlin.
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