Despite years of focused effort, many enterprises are still struggling to realise the full value of their cloud investments.
In its latest report, “Sky High Hopes: Navigating the Barriers to Maximising Cloud Value,” Accenture surveyed 750 senior business and IT professionals at large enterprises across 11 industries and 17 countries.
It found that just 37% of companies say they are achieving the full value expected on their cloud investments – a mere 2% increase since Accenture’s original research report in 2018.
While value realisation has never been more important, only 45% of business and IT leaders say they are “very satisfied” with their cloud outcomes, just a 1% gain over 2018. Moreover, just 29% are completely confident that their organisation’s cloud migration initiatives will deliver the expected value at the expected time.
Accenture’s report highlights that, when businesses have gone more heavily into the cloud, outcomes are significantly better. Forty-six percent of high adopters report fully achieving their expected cloud benefits, compared to 36% of moderate adopters and 28% of low adopters.
Businesses recognise that they need cloud technologies for speed and agility to mitigate the major challenges they are facing and to drive transformational change to create new opportunities and value. According to the report, 80% of business executives now look to cloud as a means of mitigating business uncertainty and lowering risk. In addition, 87% view cloud as a critical component of their strategy for achieving their corporate sustainability goals.
“Cloud-based transformation offers companies the most powerful way to reinvent their businesses, unleash the expertise and creativity of their people, enhance their sustainability efforts and create new stakeholder value,” says Karthik Narain, global lead at Accenture Cloud First. “But the reality is that not every company is unlocking the full potential value of the cloud. In fact, our newest report shows a surprisingly small two-year improvement in returns on corporate cloud initiatives, suggesting that a more thoughtful and holistic approach is needed.
“Competing in the age of Covid-19 and beyond requires that companies implement a cloud-first strategy, in which every element of their business leverages the power of the cloud, right now.”
The research also examines what may be holding businesses back when it comes to driving their cloud agendas and achieving their goals. “Lack of skills” was most frequently included in CEOs’ top three perceived barriers (54%). “Security and compliance risk” was predominant among all respondents (46%), followed by “legacy infrastructure & application sprawl” and “misalignment between IT and the business” (both at 40%).
The findings also show that CEOs have markedly different impressions of cloud results and concerns than fellow C-suite leaders and high-ranking company officials: 54% of CEOs are completely confident in their organisations’ ability to deliver cloud initiatives with the expected value at the expected time, versus 34% of CIOs and only 28% of CFOs.
“Our research findings point to the complexities involved in successfully executing cloud migrations that produce the anticipated business value,” Narain adds. “The good news is that by taking a rigorous, outcomes-centric approach to devising a customised cloud strategy, partnering with the right experts and addressing challenges outside of the technology itself, such as upskilling their people to be more productive, businesses can achieve the results and return on investment they’re seeking.”
To extract the full business value of cloud technologies, Accenture recommends that organisations adopt fundamentally new ways of working, shifting to new operating models and developing new roles and skills. Four key areas for companies to address include:
* Business value focus: develop an optimal cloud strategy anchored to comprehensive economic business cases to identify revenue upside and cost efficiency opportunities while aligning goals and putting company leaders on the same page.
* People and culture change management: implement new upskilling and talent readiness programs, along with new operating models, to help transform and enhance how people work so they can better meet rapidly changing needs.
* Data and AI: unlock industry- and function-specific data insights and intelligence trapped in legacy systems with the power of cloud data models.
* Partnering for success: leverage the skills and experience of strategic partners to expand and enhance the organisation’s existing capabilities. Cloud-managed services are often an option for companies looking to access the right skills while maintaining cost efficiency.
“For South Africa, the launch of the Microsoft data centres in 2019 and the AWS regions earlier this year has created the necessary impetus for cloud adoption,” says Jigyasa Singh, technology MD for Accenture in Africa. “Business and technology leaders across industries are recognising the role that cloud plays in democratising technology and providing a platform for innovation and agility, and no one wants to be left behind.
“In the domestic market, transformative cloud experiments are on the rise and organisations are trying to demystify the complexities of their “unique” cloud journeys. They are looking for innovative approaches to solve for skills shortfall, make regulatory and data privacy considerations, and overcome complexity of legacy technology landscapes, as well as create the right operating environment in order to realise the potential of cloud,” Singh adds.