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Sky high hopes: Navigating the barriers to maximizing cloud value

November 13, 2020 -MINUTE READ

RESEARCH REPORT

In brief

  • Accenture surveyed companies to determine how far they are advancing in terms of the business value achieved from cloud initiatives.
  • We found nearly two-thirds haven't fully achieved their expected outcomes, even as the COVID-19 pandemic has turned cloud adoption into a mandate.
  • The good news is that cloud adopters have achieved distinct benefits, though results vary by adoption rate, company size and geography.
  • But adopters also have multiple hurdles in common. Each deserves careful consideration and can be addressed with new ways of working.

Introduction: Cloud, COVID and the new reality

Need a solution to help your business adapt to a rapidly evolving economy? It's in the cloud.

In recent years, businesses have increasingly turned to cloud migration to improve elasticity, efficiency and innovation. The onset of the COVID-19 pandemic turned cloud adoption into a mandate: Becoming "cloud first" is now recognized as key to surviving in an era of socially distanced remote work, online commerce and a more challenging business environment generally.

Indeed, companies are seeing rewards for their cloud investments...but they're encountering pitfalls, too. In its new "Cloud Outcomes" research, Accenture surveyed companies to determine how far they are advancing in terms of the business value reaped from cloud initiatives.

We discovered that most adopters haven't fully achieved their expected outcomes while leaders' confidence in the migration is relatively low. The results should serve as a wake-up call to business leaders: As you navigate to the cloud, be aware of the barriers that can erode value.

Key findings from Cloud Outcomes research

37%

Companies had fully achieved their expected outcomes from cloud, a mere 2% increase.

45%

Companies that are very satisfied with the cloud outcomes.

29%

Companies completely confident that their organization’s cloud migration initiatives will deliver the expected value at the expected time.

Setting the table stakes

First, the good news: Cloud adopters by and large are seeing real benefits, namely: greater cost efficiencies, improved service levels and faster speed to market. Cloud migration has enabled them to reimagine their business models and build resilience into their companies.

But not all adoption stories are alike. We discovered a distinct pattern with respect to which companies are making greater strides than others. Businesses reporting the greatest success tended to be high adopters. While nearly half (46%) of high adopters reported fully achieving their expected cloud results, compared with 36% of moderate adopters and 28% of low adopters, slightly more than half (54%) did not.

High adopters tended to be ahead of the curve in working with partners to achieve their cloud results: We found that 29% of high adopters use cloud managed services “to a great degree,” nearly three times more than moderate adopters and ten times more than low adopters. Further, those that use cloud managed services “to a great degree” are more likely to fully achieve intended benefits (48%) than those that do not (35%).

Two other characteristics common to the most successful cloud adopters? Many were larger companies, with $10B or more in revenue, and were often based in Latin or North America. The largest companies saw the most success in the areas of speed-to-market and service level benefits.

Percent of respondents reporting they have “fully achieved” their expected cloud outcomes.

Hurdles to cloud adoption

The complexity of cloud migration gives rise to a number of obstacles. The most commonly reported hurdles to cloud adoption in our survey were "security and compliance risk," "legacy infrastructure and application sprawl" and "misalignment between IT and the business." It's worth noting, however, that every barrier listed was mentioned by more than a third of all respondents. This finding suggests that all the barriers merit careful consideration as companies begin their cloud journeys.

Just as cloud migration success varied by company adoption rate, so too did the hurdles. Though all categories of adopters (low, moderate and high) listed security as a top barrier, they differed on whether their top three concerns included data sovereignty, legacy infrastructure/application sprawl, lack of skills, complexity of business, and misalignment between IT and business.

RankLow AdoptersModerate AdoptersHigh Adopters
1Lack of skills (46%)Security (45%)Security (52%)
2Security (45%)Legacy Sprawl (43%)Complexity (48%)
3Data Sovereignty (43%)Misalignment (40%)Misalignment (43%)

Percent reported in Top 3 barriers to achieving expected cloud outcomes.

Achieving cloud expectations

To achieve the full potential of cloud requires more than technology. Organizations must incorporate new ways of working and develop new roles and skills. Four critical areas for companies to address include:

Business value focus

Develop a cloud strategy anchored to economic business cases to identify revenue upside and cost efficiency opportunities while aligning goals.

Workforce and culture change management

Implement talent readiness programs and new operating models to evolve culture, transforming how people work and how they meet rapidly changing needs.

Data & AI

Unlock industry- and function-specific data insights trapped in legacy systems through cloud data models.

Partnering for success

Leverage the skills and experience of appropriate partners. Cloud managed services can help companies access key skills while keeping costs down.

Related capabilities

Cloud migration

Migration to cloud is vital for companies looking to achieve digital transformation and exploit growth opportunities while preparing for disruption.

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