Only 14% of IT spending in 2011 was dedicated to innovation and new functions to transform the business. The largest chunk (66%) was spent on operations, support, and other general “lights on” activities. But the need for IT to become fast and innovative is apparent, according to this article by Rafat Shaheen:
It is only logical for IT to strategically drive towards better alignment with business while shifting operations to service providers that arguably have the economy of scale on their side. While cost containment and reduction are important, enterprises fundamentally pursue cloud computing for agility and speed. This is particularly true since adopting a cloud computing model is not without frontend expenses. It involves the cost of retiring systems, migrating, re-architecting, re-staffing and evolving many IT processes. This spend will ultimately yield a long-term competitive advantage and significant cost savings.
According to Shaheen, it’s important to go through a process of “defining the target IT infrastructure”, identify services delivered, and critical success factors in order to define and achieve business outcomes. IT will become a service based organization, and being able to rapidly develop towards that organizational structure will create the definition between successful and stagnant IT.