Is a lack of cloud expertise causing loss of revenue?

Two thirds (64%) of UK IT decision makers say their organisation is losing out on revenue as it doesn’t have the required cloud expertise.

The research – part of a new report commissioned by Rackspace in collaboration with academics from the London School of Economics – also found that this lack of expertise is stifling creativity, with 67 per cent of IT pros saying they could bring greater innovation to their organisation with the right cloud insight.

The report looks at the wider implications of the cloud skills gap and provides a route for businesses to tackle the realities of modern IT and the resulting skills gap. Consisting of research amongst 950 IT decision makers and 950 IT pros – as well as in-depth conversations with IT leaders – in large enterprises around the world, the study uncovers current and future trends in cloud expertise.

>See also: The demand for cloud skills in the UK continues to rise 

Beyond innovation and growth, around half (46%) of UK IT decision makers believe a lack of skills is causing a lag in their organisation’s ability to deploy cloud platforms, with only 28% saying it wasn’t a problem. Two thirds (64%) also believe they need to invest more in their workforce to meet the developmental challenges of cloud computing.

These challenges are backed up by a separate study, which found that over three quarters (77%) of UK CIOs are finding it difficult to establish which cloud services are suitable for their business, and how to implement them.

Lee James, chief technology officer at Rackspace EMEA, said: “While the rise of artificial intelligence and automation may cause some to think that human insight is less important, our report shows that this is not the case. With the cloud now underpinning business transformation, the growing technology skills gap means organisations must have a strategy to access the expertise needed. Those that don’t will struggle to be competitive and innovative.”

The realities of cloud

IT decision makers are seeing the benefits of moving all or part of their IT estate to the cloud. In fact, 42 per cent of respondents say their organisation has already seen a positive return on investment (ROI) on using the cloud, with a further 44% expecting the cloud to deliver positive ROI in the future.

>See also: The journey from mainframe to cloud in a changing IT landscape

Despite the benefits, both IT pros and IT decision makers appear frustrated at not being able to use the cloud to its full potential:

• 52% of IT decision makers acknowledge that a lack of expertise is holding their business back – the average cost of revenue lost as a result predicted to be as much as £217,864,804** for large UK businesses a year.
• 85% of IT pros said that deeper cloud expertise within their organisation would help it increase the cloud’s ROI.

Most in-demand cloud skills

Nearly half of IT decision makers 46 per cent find it hard to recruit the right talent to help manage their organisation’s clouds. Migration project management (39%), native cloud app development (935%) and cloud security (34%) are the skills IT decision makers find hardest to recruit.

>See also: The skills gap and the future of hardware technicians

The top barriers to recruitment were:

• Competition for talent (30 per cent) and the inability to offer competitive salaries (30%).
• The inability to provide sufficient carer progression (26%).
• The inability to offer sufficient training (24%).

Looking at what IT pros seek in a new role may provide some pointers to businesses in the competition for workers. While salary and benefits are the top priority (60%), having the opportunity to progress in the company (48%) and the opportunity to work on interesting projects (39%) were also highly rated, showing that businesses must think broader than pay rates to secure top talent.

However, 72% of IT decision makers are looking to increase their organisation’s cloud usage in the next five years, with 55% saying that retaining talent is a concern, the challenges associated with recruitment are likely to increase.

>See also: 10 trends that will influence cloud computing in 2017

This will only be heightened with the majority of IT decision makers (84%) saying that it takes “a number of weeks or more” to train new hires, and 37 per cent stating that “months” of training and on-boarding are required.

Will Venters, assistant professor of information systems at LSE, said: “Put simply, cloud technology is a victim of its own success. As the technology has become ubiquitous among large organisations – and helped them to wrestle back control of sprawling physical IT estates – it has also opened up a huge number of development and innovation opportunities. However, to fully realise these opportunities, organisations need to not only have the right expertise in place now, but also have a cloud skills development strategy to ensure they are constantly evolving their IT workforce and training procedures in parallel with the constantly evolving demands of cloud. Failure to do so will severely impede the future aspirations of businesses in an increasingly competitive digital market.”

“With increasing use and recognition of what benefits cloud technologies bring across the entire business, IT is now more than ever expected to be the service broker for their business units. They are expected to deliver their services with the same characteristics of cloud services, for example iterative releases based on customer feedback, rapid time to market, and multiple user and business unit personas being delivered across multiple clouds in multiple geographies.”

>See also: What have businesses learnt from the cloud?

“In order to do this, organisations have to approach the planning, architecture, design, management and optimisation with a product management mindset to meet multiple demands for their services. This change in mindset demands changes in how IT is organised and the expertise required to deliver what the business now requires.”

Mariano Mamertino, EMEA economist at global job site Indeed, added: “Finding, attracting and retaining tech talent is critical to business survival, and yet it is increasingly competitive for companies to find the technical talent they need as demand surges for such skill sets. Our data shows there is a global mismatch between the cloud roles advertised versus those being searched by IT professionals, which could accelerate the growth of a cloud skills gap. As this new report spotlights, there is both a financial and innovation gap to be plugged here for businesses globally.”

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Nick Ismail

Nick Ismail is the editor for Information Age. He has a particular interest in smart technologies, AI and cyber security.