In Quest’s previous Business Technology blog post, I shared insights from recent research that we commissioned with Forrester Consulting. In sum, leaders most satisfied with the return on cloud investments (ROI) are moving quickly to hybrid clouds. Most hybrid cloud ROI leaders have already moved their core on-premises applications to public cloud infrastructure. What’s next for ROI leaders?

As their hybrid cloud strategy evolves, the next two years will see a growing embrace of cloud-powered Software as a Service (SaaS) for core business operations systems. Most readers are aware of the widespread use of CRM SaaS for marketing, sales, and service automation and HCM SaaS for HR functions such as recruiting. The news in the data is that many surveyed hybrid-cloud ROI leaders plan to migrate core operations systems such as Financial Management Systems (FMS), Supply Chain Management (SCM), and Manufacturing Resource Management (MRM) from traditional licensed software to SaaS.

With such a rosy hybrid cloud-powered future reported by surveyed ROI leaders – mostly CIOs – what could go wrong?

Privacy, Compliance, and Security Challenge Half of Hybrid Cloud ROI Leaders

Privacy and compliance, as well as security, each dominated the list of challenges for firms running a hybrid cloud environment. Nearly half of survey respondents experience these challenges while running core business applications in a hybrid cloud environment.

Multiple Data Issues Each Challenge a Third of Hybrid ROI Leaders

Surprisingly, more than a third report challenges with glitches and downtime. This matters to the business because incorrect (dirty) or unavailable data increases costs and can decrease revenue.

Data integration challenged more than a third of survey respondents. Exchanging the right information between systems is an ongoing technology challenge even among ROI leaders.

Data availability and real-time data access each challenged more than a third of survey respondents. The consequences of these challenges can include delayed transactions and  reduced insights.

Challenges Show the Need for Rigorous Upfront Planning

The number and scale of reported challenges experienced by ROI leaders point to a need for rigor in cloud readiness assessments and plans. One challenge to rigorous planning occurs as more IT decisions are made by departmental or line of business (LOB) leaders. By implication, purchasing decisions may seem to have a strong business case. However, in hindsight some LOB-led decisions may lack enough analysis about IT factors such as data integration requirements. About a third of survey respondents faced challenges as LOB leaders increasingly make decisions on business technology expenditures.

Learn More, Do More

About a third of ROI leaders reported challenges with having the right staff skills. In my next blog post about what ROI leaders in hybrid cloud environments do differently, I will share with you research data showing three approaches to fill the skills gap in a hybrid cloud environment.