IT decentralization is killing digital business innovation: VMware study

Credit: Bakhtiar Zein /

The most significant impediment to digital business innovation in the Asia-Pacific region is the decentralization of IT and its detrimental effect on enterprise operations, according to a new research report from VMware.

VMware unveiled Singapore and regional findings from its “VMware State of the Cloud 2016” research report at its vForum Singapore event. The report found that IT decentralization is resulting in IT departments being sidestepped by business leaders who adopt their own cloud-based technologies to innovate faster – with 61% of respondents in Singapore agreeing that the purchasing and management of IT are taking place outside of IT’s purview. This is to keep up with competitors (52%) and also driven by the desire to innovate faster (45%).

Survey respondents from Singapore also indicated that their companies suffer from a lack of transparency over IT spending – the highest in the Asia Pacific region (69%), and lack of awareness of overall IT spending across the business – the second highest in the region (71%).

However, IT departments are left to shoulder responsibility for things that go wrong, with 76% of respondents in Singapore agreeing that it is the IT department’s responsibility to manage the security of our applications and data.

This raises a pressing need for IT to adopt a common operating environment for all clouds to mitigate complexities, inefficiencies and security risks, and more importantly, simultaneously enable innovation, VMware said.

Line of business leaders feel that IT is not moving fast enough to support the business and its drive for innovation. This has given rise to decentralization and multi-cloud adoption, with line of business leaders in local firms purchasing an average of five additional cloud services without consulting their IT departments.

While many respondents agreed this decentralized approach increases business responsiveness to market changes (64%), allows them to bring new products and services to market more quickly (57%), increases employee satisfaction (57%) and even helps to attract better talent (52%), the respondents also agreed that the decentralized approach has led to a duplication of spending on IT services (56%), applications being developed outside of corporate or government regulations (57%) and lack of regulatory compliance around data protection (63%).

More than two-third of local respondents agreed that decentralization increases their firms’ vulnerabilities to hacking and cyber attacks (69%), given that 64% indicated that lines of business are purchasing non-secure solutions. The research also pointed to the region’s widening skill gap, with almost 7 in 10 respondents highlighting that decentralization has caused IT’s job to become more challenging, by introducing a shift in expectations on how they should be supporting the business. Seven in 10 respondents now believe the IT department should be responsible for enabling other lines of business to drive innovation, but must set the strategic direction and be accountable for security.

“This echoes what we’ve been hearing from our customers across the region – every single organization has a hybrid cloud environment, with workloads and applications across different platforms,” said Duncan Hewett, senior vice president and general manager, Asia-Pacific and Japan, VMware. “The challenge for CIOs is to continue enabling their companies to innovate and meet growth objectives, yet effectively manage and secure applications dispersed across multiple cloud environments.”

The State of the Cloud 2016 research draws its conclusions from two different surveys, both commissioned by VMware in the first half of this earlier this year. Together, the survey results tell the story of decentralization both disrupting the enterprise and driving innovation.

The first was conducted in March of 2016 by the Economist Intelligence Unit (EIU) and targeted 726 people distributed equally across the Americas, Asia-Pacific, and EMEA. All the respondents were directors or above, from companies with an average revenue of $2.1 billion, and representing 20 industries. Half of those surveyed were business decision makers and half IT decision makers.

The Vanson Bourne survey conducted in September of 2016 targeted 3,300 people from 20 countries split across the Americas (24%), Asia-Pacific (39%), and EMEA (36%). The respondents represented 20 industries, with an average company revenue of $3.7 billion. Half of those surveyed were business decision makers and half IT decision makers.

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