What Must Enterprises Learn to Increase ROI from the Cloud?

Survey by Accenture shows some organizations have yet to realize the most value from their cloud strategies.

Leadership at some businesses continues to wrestle with getting the greatest return on investment from their cloud strategies, according to a report released by Accenture. Cloud transformation and plans to scale up the use of such resources are often the talk of IT circles, but the anticipated benefits can remain elusive. Though numerous organizations plan to increase their cloud investment in 2021 and beyond, it can still be a challenge for some to leverage cloud resources to the fullest.

For its report, Accenture surveyed 750 senior business and IT professionals from large enterprises from 17 countries and representing 11 industries. The results show that just 37% of the respondents indicated they fully achieved the outcomes they expected from leveraging the cloud, which represented a 2% increase from a 2018 report on this topic. Some 45% of the respondents from the current survey were very satisfied with their cloud outcomes. Only 29% of the respondents were completely confident their cloud migration initiatives would deliver the intended value within the expected timeframe.

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There can be multiple reasons why companies might feel a cloud strategy comes up short compared with intended goals. Karthik Narain, global lead for Accenture Cloud First, says the way organizations responded to the pandemic by using the cloud more, and what they witnessed from their peers, helped elevate knowledge and understanding of the cloud to a new level. “When they wanted to look at moving from capital expenditure to more OpEx (operating expense), they thought about cloud,” he says.

Companies that doubted the potential benefits of migrating to the cloud may have gained new clarity during the pandemic, Narain says, when the demands of remote operations put the cloud in the spotlight. “I don’t think there is denial, post-COVID, of the holistic value cloud can deliver,” he says.

Narain says enterprises can take three steps to possibly see better returns from a cloud strategy:

  • Organizations should examine whether their operations give them the flexibility to scale up or down depending on business needs and demands.
  • Next, they should check to see if they can operate at speed.
  • Organizations should assess if they can reimagine their business continually.

“Amazon as a business is the epitome of constantly reinventing traditional business or creating a brand-new business that did not exist,” Narain says. He attributes Amazon’s chameleon-like ways to its data-driven culture that innovates quickly.

In-house talent and skills are also significant, yet underrated factors that influence how effective cloud strategies can be, Narain says. “We’ve been talking about talent, training, and change management for almost every technology and capability,” he says, “but this is fundamentally different.” When enterprises migrate to the cloud, accelerate, grow, and innovate, their IT workforce is thrown into brand-new environments where they might not know where code is running, Narain says. “Teaching them how to take advantage of all the services through which systems run in the cloud is a big change.”

That change includes unlearning certain habits, he says, and letting go of some tasks. “You don’t need to write every piece of code or you don’t need to create every capability,” Narain says. “There are several cloud-native capabilities available that ecosystem providers have already invested in.” He says there is also an opportunity with the cloud for business and IT to co-innovate on the same platform, which is a situation they might not be used to.

The complexity and magnitude of such changes in brand new environments, while in a time crunch thanks to the pandemic, can make moving forward seem an enormous task, Narain says. Part of the solution may be to keep working at exploring what cloud has to offer. He says some organizations try to dip their toes in cloud by using simple systems and/or noncritical applications, which may undercut or mask the tangible outcomes of embracing the cloud fully. “The more you adopt, the more you use cloud, you’ll get better value from it,” Narain says. “Trust that cloud will have to be adopted at scale for you to get value.”

 

For more content on cloud strategy, follow up with these stories:

Where Cloud Spending Might Grow in 2021 and Post-Pandemic

Is Your Pandemic-Fueled Cloud Migration Sustainable?

Study: Cloud Migration Gaining Momentum

Joao-Pierre S. Ruth has spent his career immersed in business and technology journalism first covering local industries in New Jersey, later as the New York editor for Xconomy delving into the city’s tech startup community, and then as a freelancer for such outlets as … View Full Bio

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