Becoming Cloud-Powered: CIOs Must Look Beyond Technology
Enterprises must be strategic rather than tactical when allocating resources to cloud transformation.
Successfully integrating cloud capabilities is vital for an organization’s longevity. However, organizations often struggle to realize the value of their investments, observes Tyson Cornell, deputy and cloud and digital co-leader at PwC, and shares how CIOs can implement smarter strategies for cloud transformation.
PwC’s Cloud Business Survey found that only 10% of executives implementing cloud across the business are seeing holistic benefits of the transformation.
Here’s what’s missing: They’re leading with tactics instead of strategy, getting too in the weeds with technology and not considering the company’s broader vision and business outcomes.
Before allocating any dollars to cloud transformation, organizations must begin with a strategic rather than a tactical mindset. This means being clear and intentional about when, where and why the organization is leveraging cloud technology. All too often, organizations don’t take this first step to strategize and instead hit the “cloud hump,” pausing all cloud spending to figure out how the cloud drives business goals.
Even though there is no one-size-fits-all approach to becoming a cloud-powered company, there are three common tactics that organizations should familiarize themselves with to achieve optimal results: migration, modernization and cloud-native implementation.
Having a strong handle on each method and how they impact an organization’s overall goals will empower technology and business teams to drive the highest ROI and sustained strategic focus.
See More: How To Transform Customer Experience Using the Cloud
Migration, Modernization and Cloud-Native Implementation
Almost all organizations will utilize migration, modernization or cloud-native implementation; however, it’s essential to understand that they lay a foundation for success. They are not what creates the business outcomes.
Cloud migration is commonly referred to as the lift and shift approach. It involves simply re-hosting applications from an organization’s own data centers to the cloud. Importantly, migration does not involve the app configuration or basic code adjustments required for organizations to truly take advantage of cloud features. While simple migration may provide some benefits, they are not usually visible to the broader business or unlock the cloud’s true value.
Cloud migration is distinct from modernization, which involves applying new technology and programming languages to pre-existing applications.
Both migration and modernization can fall short of the efficiency and cost-reduction that business leaders expect. This happens when IT teams become enamored with new technology without considering how it might benefit the broader business or change fundamental operations.
For example, migration and modernization can unlock new cybersecurity capabilities for an organization running on a cloud-based communications platform. This is monumental for IT, which may have previously spent significant resources securing the organization against threat actors. However, the end-user’s experience on the platform is still the same, as smooth cybersecurity operations on the backend don’t unlock new capabilities that enable employees to drive business goals more effectively.
Cloud-native implementation involves leveraging technology designed from the ground up to run on the cloud. This creates a dynamic environment that enables organizations to move more easily beyond adopting technology for technology’s sake to truly grasp the capabilities that characterize cloud-powered companies. While 68% of cloud-powered companies have moved operations to the cloud, compared to 35% of other companies surveyed by PwC, these companies take implementation one step further.
Cloud-powered companies are leveraging the unique features of cloud technology and communicating these capabilities to the entire organization so that all stakeholders can take advantage. They know cloud-native implementation isn’t as powerful when divorced from business outcomes.
For example, the IT team of a cloud-powered company might apply artificial intelligence or machine learning cloud capabilities to the platform in the above example and educate employees on how they can take advantage of new self-service tools or enjoy hyper-relevant search results.
Importantly, cloud transformation requires intentionality, regardless of which tactic organizations determine to be most useful. Whether it’s migration, modernization or cloud-native implementation, transformation not rooted in business strategy ultimately leads to value leakage.
Oftentimes, CIOs cave to the pressure from other business leaders and implement cloud technology to check a box rather than to radically transform the business. Despite this pressure, it’s up to CIOs to ensure a thoughtful approach to cloud transformation that closes the loop between technological transformation and enterprise-wide value creation.
How to Make the Cloud Work for You
To ensure that cloud transformation moves beyond simply updating technology, CIOs should begin the journey with a roadmap that outlines capabilities the organization hopes to unlock, how these capabilities drive broad business goals, and what steps are required to get there.
In some cases, this might extend only to migrating certain applications that provide little business value and will eventually be replaced. It might also involve the modernization of some applications or investment in entirely new ones.
The differentiating capabilities sought by the organization will determine where and when migration, modernization and cloud-native implementation make the most sense.
While the process may look different for each organization, none will successfully implement cloud technology without truly rearchitecting the business.
This requires CIOs to think about business processes in a fundamentally different way. Organizations often run on process boundaries, where one business unit has an advantage over another based on the data and insights they manage. To become a truly cloud-powered company, CIOs need to start with the idea of an unconstrained environment.
By deconstructing digital business processes into microservices, technology teams will have the flexibility needed to organize fundamental business processes around cloud technology in a manner that delivers the most value.
This process requires input from the broader C-suite. Over 80% of CIOs at cloud-powered companies have strong relationships with C-suite peers (CEOs, CDOs, CISOs, etc.), versus 66% of CIOs at other companies. C-suite collaboration ensures that key business functions are considered during every stage of the cloud transformation journey and communicated to all members of the organization.
See More: Cloud Cost Optimization as a Lever Against Inflationary Pressure
Other Considerations to Drive Cloud Power
In addition to keeping an enterprise-wide view of cloud transformation top of mind, CIOs and their C-suite counterparts should consider potential risks introduced by the new technology.
Whether for cybersecurity, data privacy or compliance, organizations must focus on trust and controls to ensure that cloud transformation does not put the organization in a vulnerable position.
Cloud-powered companies recognize the value of trust and controls, with 78% having implemented formal and distinct cloud controls versus 33% of all other companies.
Trust and controls are not a nice-to-have but are an integral part of the cloud transformation journey. Embedding them into the technology will save the organization time and money in the long run by making people, processes, technology and data become secure by design.
With a birds-eye view of the cloud transformation journey, coupled with the integration of trust and collaboration across the c-suite, organizations will be well prepared to ensure maximum ROI on their cloud investments.
How are you taking a more holistic approach to cloud transformation? Share with us on Facebook, Twitter, and LinkedIn. We’d love to know!
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