Successfully integrating cloud capabilities is vital to an organization’s longevity. But organizations often struggle to realize the value of their investments, notes Tyson Cornell, deputy and co-head of cloud and digital at PwC, and shares how CIOs can implement smarter cloud transformation strategies.
PwC Cloud business research found that only 10% of business cloud executives see holistic benefits from the transformation.
Here’s what’s missing: They lead with tactics instead of strategy, get too much into the weeds with technology, and don’t consider the company’s larger vision and business results.
Before committing any dollars to cloud transformation, organizations need to start with a strategic, not a tactical, mindset. This means being clear and intentional about when, where and why the organization uses cloud technology. Too often, organizations don’t take this first step of strategizing and instead hit the “cloud hump,” stopping all cloud spending to understand how the cloud drives business goals.
While there is no one-size-fits-all approach to becoming a cloud company, there are three common tactics that organizations should become familiar with in order to achieve optimal results: migration, modernization, and cloud deployment.
A strong command of each method and how they impact the organization’s overall goals will empower technology and business teams to drive the highest ROI and sustainable strategic focus.
See more: How to transform the customer experience using the cloud
Cloud migration, modernization and deployment
Almost all organizations will use cloud migration, modernization or deployment; however, it is important to understand that they lay the foundation for success. They are not what create the business results.
Cloud migration is commonly referred to as a lift-and-move approach. This involves simply re-hosting applications from the organization’s own data centers to the cloud. Importantly, the migration does not include the application configuration or major code adjustments required for organizations to truly take advantage of cloud features. While a simple migration can provide some benefits, they are usually not visible to the wider business or unlock the true value of the cloud.
Cloud migration differs from modernization, which involves applying new technologies and programming languages to existing applications.
Both migration and modernization may not achieve the efficiencies and cost reductions that business leaders expect. This happens when IT teams fall in love with new technology without considering how it can benefit the broader business or change fundamental operations.
For example, migration and modernization can unlock new cybersecurity opportunities for an organization running on a cloud-based communications platform. This is monumental for IT, which may have previously spent significant resources protecting the organization against threats. However, the end-user experience of the platform is still the same because smooth backend cybersecurity operations do not unlock new capabilities that enable employees to drive business objectives more effectively.
Cloud deployment it involves using technology designed from the ground up to run in the cloud. This creates a dynamic environment that allows organizations to more easily move beyond adopting technology for technology’s sake to truly understand the opportunities that characterize cloud-powered companies. While 68% of cloud-based companies have moved their operations to the cloud, compared to 35% of other companies surveyed by PwC, these companies are taking implementation one step further.
Cloud-powered companies take advantage of the unique characteristics of cloud technology and communicate these capabilities to the entire organization so that all stakeholders can benefit. They know that cloud deployments aren’t as powerful when separated from business outcomes.
For example, a cloud-based company’s IT team could apply artificial intelligence or cloud-based machine learning capabilities to the platform in the example above and train employees on how they can take advantage of new self-service tools or enjoy hyper-relevant search results.
impCloud transformation requires intentionality, regardless of which tactics organizations find most beneficial. Whether it’s migration, modernization, or cloud deployment, transformation that isn’t rooted in business strategy ultimately results in value leakage.
Often, CIOs succumb to pressure from other business leaders and implement cloud technology to tick a box rather than radically transform the business. Despite these pressures, it is up to CIOs to provide a thoughtful approach to cloud transformation that closes the loop between technology transformation and enterprise-wide value creation.
How to make the cloud work for you
To ensure cloud transformation goes beyond simply updating technology, CIOs should begin the journey with a roadmap that outlines the capabilities the organization hopes to unlock, how those capabilities drive broad business objectives, and what steps are needed to get there.
In some cases, this may only extend to migrating certain applications that provide little business value and will eventually be replaced. This may also include upgrading some applications or investing in entirely new ones.
The differentiating capabilities sought by the organization will determine where and when cloud migration, modernization and deployment will make the most sense.
While the process may look different for each organization, none will successfully implement cloud technology without truly re-architecting the business.
This requires CIOs to think about business processes in a fundamentally different way. Organizations often operate at process boundaries where one business unit takes precedence over another based on the data and insights they manage. To become a truly cloud-based company, CIOs must start with the idea of a limitless environment.
By deconstructing digital business processes into microservices, technology teams will have the flexibility to orchestrate core business processes around cloud technology in a way that delivers the most value.
This process requires input from the broader C-suite. Over 80% of CIOs at cloud-based companies have strong relationships with C-suite peers (CEOs, CIOs, CISOs, etc.) versus 66% of CIOs at other companies. Collaboration with the C-suite ensures that key business functions are considered during each stage of the cloud transformation journey and communicated to all members of the organization.
See more: Optimizing cloud costs as a lever against inflationary pressures
Other considerations for leveraging cloud power
In addition to maintaining an enterprise-wide view of the cloud transformation, CIOs and their C-suite colleagues must consider the potential risks introduced by the new technology.
Whether for cybersecurity, data privacy or compliance, organizations must focus on trust and control to ensure that cloud transformation does not leave the organization in a vulnerable position.
Cloud-powered companies recognize the value of trust and control, p 78% have implemented formal and clear cloud controls versus 33% of all other companies.
Trust and controls are not nice things, but they are an integral part of the cloud transformation journey. Building them into the technology will save the organization time and money in the long run by making people, processes, technology and data secure by design.
With a bird’s-eye view of the cloud transformation journey, coupled with the integration of trust and team collaboration, organizations will be well-equipped to ensure maximum return on their cloud investment.
How do you take a more holistic approach to cloud transformation? Share with us at Facebook, Twitterand LinkedIn. We’d love to know!
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