Although as we reported last week more businesses are turning to the cloud it seems that some UK companies are lagging behind the trend.
According to a new Service Provider and Performance Satisfaction survey by audit and accounting specialist KPMG 71 percent of UK organizations are spending 10 percent, or less, of their IT budget on cloud services.
As part of a global study of almost 2,100 contracts covering deals worth £7.8 billion (around $12 billion) it looked at 330 UK-based contracts. Asked why they are reticent about employing cloud services, the top 3 reasons cited by UK respondents centered around data location, security and privacy risks (26 percent), concerns over regulation and compliance (16 percent) and cynicism around the ease with which cloud services can integrate with legacy systems (15 percent).
The results show that many organizations continue to rely on 'tried and tested' outsourcing models. The favored destinations for outsourced IT support services remain India (51 percent), Poland (8 percent) and South Africa (8 percent).
"Despite widespread acceptance that cloud services offer access to the latest technologies, and make IT more accessible, adoption remains relatively sluggish. While concern about the security risks surrounding new technology is understandable it may also be disproportionate, as cloud options are just as safe as other outsourcing solutions. Of course, investors and stakeholders will welcome caution on the part of the buyers, but they also want to see innovation, meaning that UK plc will need to find the right balance to remain competitive," says Jason Sahota, director in KPMG's Shared Services and Outsourcing Advisory team.
The survey also shows a nervousness about IT spending in the UK despite improvements in the economy. Only 43 percent said they plan to increase spending on outsourcing in the next two to three years. This figure contrasts with 77 percent this time last year.
More information of the study is available on the KPMG website.
Image Credit: Brian A Jackson / Shutterstock
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