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Cloud transformation – reaching your full cloud potential

Few companies are harnessing the full potential of the cloud, but business leaders can change the game by paying careful attention
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Image: Jopwell via Pexels

24 May 2022

In association with PwC

Though companies have quietly embraced cloud computing for years, 2020 demonstrated to boards and C-suites just how vital the cloud is to survival and the pursuit of new opportunities.

Despite the acceleration of cloud adoption, most companies are barely scratching the surface of its potential. A 2021 PwC survey of C-suite leaders found that more than half of respondents were yet to reap substantial value from their cloud investments. This unrealised value is significant, but it only begins to speak to the cloud’s untapped potential to propel business strategies forward.

 

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Despite the progress that companies have made in their cloud journeys, many now face the ‘cloud hump’, a term for when a period of significant cloud spending is followed by a forced pause to figure out a new path forward. As one executive cautioned: “if organisations believe that the cloud is mostly about moving data to slash IT costs, they have a problem.” Instead, the cloud should be about reconceiving the way the business operates.

Although pivoting from tactical to strategic isn’t easy, here are three critical factors to help you close the cloud potential gap:

1.  Establish clear objectives and a strategy for value creation

For many organisations, a cloud transformation programme creates the urge to ‘lift and shift’ data and applications from legacy IT systems to cloud platforms merely for the cost-saving benefit. However, this approach leaves enormous value on the table.

Take the HSE, for example, which is Ireland’s national healthcare system. With the onset of the Covid-19 pandemic, the HSE needed to rapidly implement new information flows and systems to model and manage the impact of the pandemic. They turned to the cloud to provide the required agility and in a matter of weeks, they delivered what would have taken months or years to deliver in a traditional IT delivery model – new systems to facilitate testing, vaccination and reporting. An added benefit of their use of the cloud was that when the HSE was later struck by a major cyber attack, the separation and security of their cloud-hosted systems allowed these critical systems to remain online.

The lesson? View the cloud as a catalyst for business value creation and a way to help your organisation to thrive in a changing business environment.

2. Reimagine your challenges with a cloud-centred mindset

Another pitfall is seeing business challenges through a ‘pre-cloud’ lens.

EU regulators have mandated that banks open their data interfaces for greater transparency with regard to system risks and to allow interoperability with central bank systems. One particular bank saw the cloud as a means of ensuring regulatory compliance, but its IT team soon realised that the new cloud interfaces provided a platform for fintech start-ups to sell their digital services. Using the cloud, the bank was then able to leverage its large customer base and market knowledge in tandem with the fast-moving fintech ecosystem.

The lesson? The most adept cloud operators have evolved their mindset and approach to take advantage of the cloud.  They constantly experiment and measure results in real-time and shift to other areas without regret. This process creates the agility that feeds innovation.

3. Celebrate wins, but don’t declare victory too early

Most executives understand the transformative power of cloud technologies, but many focus their attention and capital spending in the first year of the launch. In reality, cloud success requires continuous updating, refining and revisiting agreed-upon paths to determine if better options are available.

We’ve seen multiple cases where a company’s board approved a cloud investment in year one on the assumption that the organisation’s IT leaders wouldn’t come back with a further request for funding for two to three years. Meanwhile, the initial Year One success generates further investment demand for data, digital and architecture resources to exploit new opportunities for innovation afforded by the cloud.

The lesson? The cloud is not a one-off technology project. It requires ongoing attention, evaluation of additional investment needs and the reassessment of strategies and tactics.

Summary

To achieve competitive advantage and gain real value from transformation in the cloud, organisations need a multi-faceted approach. We are ready to help you with this to maximise the value of your cloud transformation.

The original version of this article was first published in PwC’s Strategy& publication.


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