Rushed cloud migrations result in escalating technical debt

While 93% of CIOs expect an increase in IT budgets for 2023, 83% of them are feeling pressured to stretch their budgets even further than before, with a focus on managing cloud costs more efficiently and addressing the growing issue of technical debt, according to SoftwareOne.

managing cloud costs

The survey found that 72% of CIOs admit they are behind in their digital transformation because of this technical debt, which is of particular concern as 92% of CIOs are expected to deliver digital transformation initiatives that act as revenue generators this year.

38% said the accumulation of this debt is largely because of rushed cloud migrations during the pandemic, with 31% failing to optimize their workloads before commencing the migration process. A further 38% revealed that their organization miscalculated the cloud budget when provisioning, which resulted in significant cloud overspend.

Transparency and control of cloud costs

Many organizations also still have multiple on-premises IT legacy systems and 51% of CIOs state that the complexity of legacy IT is one of the top three challenges they currently face.

“Businesses are dealing with an uncertain economic environment, which makes planning big IT transformations a challenge. Yet organizations need to move to the cloud and modernize legacy applications to remain competitive. We’re seeing a real need for a combination of innovation with optimization. Our clients are looking for pragmatic step-by-step transformation initiatives, rather than wholesale megalithic projects that can be hard to get approved when budgets are under pressure,” said Craig Thomson, SVP of Cloud and Application Services at SoftwareOne.

The survey findings reflect this. 45% of CIOs surveyed believe having improved transparency and control of cloud costs would help them extract greater value from their cloud investments and therefore improve company buy-in. 80% plan to increase their investment in FinOps to achieve this and 39% say they will use cloud native tools to reduce licensing costs.

Challenging year ahead for businesses worldwide

Despite budget pressures, 82% will increase their investment in application modernisation. Security remains a priority, with 92% increasing investment in this space.

“The next year is going to be a challenging one for businesses worldwide. The increased agility that comes with cloud computing will allow companies to better respond to these unexpected market changes. Adopting FinOps practices will help them optimize not just their spend but the processes, accountability and transparency required to get maximum value from their cloud investment. Once legacy IT is migrated and modernised, and cloud is optimised, any savings can be reinvested into innovative projects that help the IT team to achieve more with less,” said Dan Ortman, Global Practice Lead FinOps at SoftwareOne.

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