Three actions to unlock greater cloud value

At this year’s World Economic Forum, Accenture unveiled Total Enterprise Reinvention, a report focusing on how a handful of companies, called Reinventors, are systematically changing their industries.

What sets Reinventors apart from their peers is a robust digital core.  Leveraging the power of cloud, data and artificial intelligence, this digital core gives companies the agility to drive growth, improve operations and reinvent themselves. These companies are not just migrating to the cloud—they are using everything it offers to build a strategic market advantage.

Of course, this process is not without its challenges. We’ve examined how companies can tackle the persistent barriers to realizing the most value from their cloud investments so that other organizations can build on their experience. In short, there are three key actions to take.

1. Get the business aligned

If there is one thing we can say for certain in 2023, it’s that people are obsessed with value. In recent research, 86% of companies say they have increased the volume of their cloud initiatives in the past two years, yet just 42% say they are fully achieving their expected outcomes. To tackle this, we identified five practices that companies should embed to get the most out of their cloud investments.

When asked what their top barrier to getting full value from the cloud is, nearly one-third of companies (32%) cited a “misalignment of IT and the business.” When I work with chief information and chief technology officers to get their cloud and business strategies working in harmony, I’ve found that they often need to take a step back and assess which two or three products or capabilities are essential to driving their business.

For example, in many organizations, the business team sets priorities, and the IT or technology function responds to meet those. It’s more effective to have a product strategy focused on the value chain that anchors the company’s cloud agenda directly to its business activities.

Shift from migration to innovation

When I sat down with CIOs previously, the conversation would often center on their cloud migration progress. Now, we’re discussing the new revenue streams that cloud is driving; how it’s helping their products get traction in the market; how it’s creating new customer experiences; and how much data their managers have.

The secret weapon for driving these ambitions across a company is a high-value use case. For example, I recently had discussions with a life sciences company whose research and development section is exploring how it could increase productivity by 50% using the cloud. That's an ambitious outcome that a whole organization can rally around.

Ambition needs a plan—and in the feverish atmosphere of 2023, a state-of-play assessment is always useful. Accenture’s cloud value finder tool, part of our MyNav platform, helps companies identify the high-opportunity areas they need to mature to unlock greater capability. From there, CIOs and their C-suite colleagues can build an effective cloud value campaign. 

2. Parse the technology complexity

Many companies have already taken a step toward the future with their digital core investments. But legacy technology and their increasingly complex landscape is dragging momentum. In fact, 41% of companies rate the complexity of business and operational change as the top barrier to achieving their anticipated cloud outcomes.

CIOs may be trying to modernize their tech estate and simplify its complexity, while responding to any number of flashing lights: Where do I place my workloads on the cloud? How do I manage data sovereignty? Should I be using multiple cloud providers?

When it comes to complexity, CIOs need to map out where they want to go. Once the business priorities are clear, they can take a robust architectural approach to their digital core, relying on the most appropriate, composable parts available to them.

In many instances, this involves a hybrid strategy—one that includes co-located data centers, private cloud, public cloud and edge—with a decision tree to guide engineers and business leaders on workload placement. A Continuum Control Plane can be especially useful to coordinate and manage workloads across multiple venues.

There are also actions CIOs can take to tackle the complexity of their digital estate. Large systems can be broken up; modular architecture blueprints can be deployed for speed and simplicity; and, where possible, CIOs should reinforce security controls with automation.

Tackling the cost “double bubble”

Many of my current conversations with CIOs are dominated by cost optimization. These leaders are in a tough spot: they are asked to rein in spending, while finding the funds needed to build or reinforce their digital core and drive their ability to innovate.

Cloud is a case in point. CIOs are currently being squeezed by a “double-bubble”: cloud costs are rising and likely to outpace non-cloud technology spend in the coming months, yet companies are still spending significant amounts on legacy tech as they are mid-migration.

It’s a tough corner to fight, but it’s crucial that CIOs go the distance. This is a new way of handling costs and these investments are essential drivers of growth—something the wider C-suite might not fully appreciate. An organization’s operating expenditure might be rising now but its capital expenditure should be decreasing. And when that double-bubble deflates, the CIO will have the ideal technology platform on which to build a new performance frontier for their company and their industry.

3. Work on the human systems

Every cloud needs a culture change, which CIOs need to lead from the top. And every investment in technology needs to be matched by an investment in people and skills.

When CIOs look at their technology spend, their first thought needs to be: “How do I drive the best value for the business?"—not “How do I keep the lights on?” They need to show their leaders how cloud can drive value and help their company innovate faster and solve their most stubborn challenges.

One tactic we have seen deliver up to 60% better outcomes is establishing a network of cloud change champions throughout the business. These people will help improve collaboration, speed and innovation across your organization. They will also help bring the business and technology sides of your company closer together so you can execute on your shared agendas.

Your people can only deliver if they have the skills needed to do so. The technology talent pool is not large enough to meet demand, so organizations will have to upskill workers to unlock their inherent potential. When an entire organization is fluent in technology, its culture is primed to deliver change—and that makes it ideally placed to reinvent its industry.

Tip the scales to take advantage of AI

The advent of AI technologies such as ChatGPT is making many companies reassess their next strategic moves. This is an ideal opportunity for CIOs to get the C-suite to rally around a more cohesive digital core strategy for data, AI and technology.

Taking advantage of emerging capabilities like AI requires cloud to be operating at full value. Many organizations are on the cusp of achieving the value they need from their cloud investments. CIOs can use this moment to help their companies clear those rugged barriers and get more value from the cloud.