It’s widely expected that within the next few years, businesses will, for the first time, spend more on cloud than on traditional IT. Yet while most companies have increased the scope and scale of cloud initiatives, few have achieved the expected value from their investments. Many struggle to make cloud deployments work efficiently, with one-third of cloud computing spend going to waste.
Organizations that focus only on technology are missing out on some of the key benefits of their cloud transformations. By focusing on cloud adoption rather than on what happens when you live in the cloud, most companies receive little, if any, incremental value from their continued migrations.
To unlock the full value of their cloud investments, organizations should look beyond technology adoption and change the way they think and act. This includes transforming IT estates and complex business-critical systems and tapping into trapped data to seize the opportunity for total enterprise reinvention.
The most important practice in mastering the Cloud Continuum? A fundamental mindset shift to an obsession on value.
As we exit an era of abundance and growth, companies are under pressure to qualify and prioritize value-based use cases and relentlessly measure and demonstrate ROI. Connecting your business strategy to your cloud investment is the starting point. But approaching cloud primarily to reduce IT costs misses the impact of a cloud strategy on the broader C-suite agenda. Our research found that viewing cloud as a strategic enabler led to better outcomes against multiple business priorities, including 1.2x-2.7x greater cost savings than using cloud primarily to drive operational efficiency.
Organizations should look beyond technology adoption and use cloud to help power enterprise reinvention. Businesses that move quickly to adopt a full range of cloud products and services will be well positioned to compete and grow.
Early cloud adoption focused on migrating from on-premises infrastructure to a single public cloud venue. Now organizations wrestle with hybrid and multi-cloud architectures—when are they necessary, and how can they be technically enabled?
Companies should combine the spectrum of capabilities and services of the evolving cloud landscape, from public and private to Edge and everything in between. This will require skilled architects to navigate the plethora of technical decisions.
And because many organizations operate fragmented architectures of both on-premises and cloud technologies—with different standards, processes and tools—they need strategies for workload placement that embrace hybrid and multi-cloud architectures. Factors to consider include network latency, the ability to move workloads between different cloud venues, and transitionary architectures to de-couple and reduce legacy technology during the migration process.
A key question for CIOs: How can we bring technology and data together to create value?
Migrating data to the cloud is only the first step. Cloud supports the larger opportunity of creating a trusted data platform across disparate parts of the business—helping reinvent workflows, initiate engaging experiences, and fuel innovation and growth.
But taking the next step isn’t easy. Only a small number of enterprises are using cloud strategically today, implementing the advanced practices needed to drive profitable growth and innovation.
Organizations need to take responsibility for how they use, store and share data. How long should it be stored? Do individuals have a right to delete personal data about them? Are AI systems being trained ethically? It requires an industry lens to manage trade-offs between consumer expectations and corporate responsibility.
Yet cloud technology and people can easily get out of sync, especially as organizations focus too much on technical enablement and minimize or ignore how people will interact with the new technology.
Many organizations focus on how to enable their workforce but not on the broader and underlying question of whom to enable. To get maximum value from cloud, organizations need to accelerate demand management, portfolio control, change management and other slow-moving governance processes.
Cloud is fast becoming a dominant expense line item. Because it can adjust to meet business demand, it’s shifting the technology cost base from a capital expenditure model to an operational expenditure model. Managing the dynamic, variable costs requires new forecasting mechanisms and processes.
The explosion of choice resulting from offerings that cater to different customer needs—e.g., multiple architectures, and varying service and performance levels—can cause costs to skyrocket when not managed with shared accountability across the business. Therefore, maximizing business value requires alignment between the CIO and their C-suite counterparts.
Fortunately, the past few years have given rise to FinOps, a new organizational discipline to control cloud spend. Bringing greater financial accountability to managing cloud’s variable spend model, FinOps helps distributed teams make business trade-offs between speed, cost and quality.
While the Cloud Continuum holds the potential to create significant business upsides, mastering new practices is the key to successfully transforming the organization across the board.
No matter where an organization is on the Continuum, stronger ROI and continuous improvement are possible. It’s about reinventing business on the back of the Cloud Continuum—and it’s as much about investing in people as it is about the technology itself.
The first step is to understand your current situation so that you can act strategically and maximize your future value from cloud. Once a value creation strategy is in place, realign investments to enable the whole of the Cloud Continuum and its constituent practices.
Understanding your current situation is the first step to maximizing your future value from cloud. Our new diagnostic tool can help you do just that.