Whatever your business or industry, as a CEO, cloud should now be a foundational part of your strategy.

I explained the benefits and relevance of cloud to the CEO in my previous blog post. Put simply, cloud is about much more than cost-effective IT—it’s a platform for business innovation and reinvention, as well as responsiveness and resilience.

But as a CEO, how do you make sure your organization actually gets all the promised value from cloud?

You need to look beyond the cost optimization opportunities to other key value drivers across your business, namely future growth, innovation and operational efficiency. Our research shows that companies that realize the most value from cloud and other technology investments grow their revenue two times the rate as those lagging in this area.

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More than just cutting costs

That’s not to say cost is irrelevant. By working with the cloud hyperscalers, you can variablize your costs, benefit from their scale economics and drive down the total cost of ownership of your IT function significantly. Examining the two big game-changing areas of opportunity further, cloud enables companies to:

Fuel growth and innovation. Cloud has been called the mother of business reinvention, and that’s no exaggeration. It’s the platform on which most future business models and hyper-targeted customer offerings will be created. Its speed and agility allow huge enterprises to experiment and iterate like a startup—with low risk and a small carbon footprint. Its interoperability and accessibility enable companies to reach out and connect and collaborate more easily across their ecosystems—another important component of innovation. This type of innovation is the stuff that is transformational, helping to create new digital businesses.

Increase operational efficiency. Cloud helps your organization make faster and better operational decisions based on real-time data analytics—in pricing, inventory, procurement, supply chain, forecasting and more. Replacing multiple sources of manually developed assumptions with a single source of the truth—powered by artificial intelligence and machine learning. Cloud also supports greater automation in areas like customer support and call centers. That makes a real difference when you’re looking to serve your customers in the best, most efficient and most agile way possible. One practical application of this efficiency is the ability to deliver a faster turn in inventory, which can translate to $100m+ in incremental sales, according to Accenture’s analysis and client experience.

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It’s important for the CEO to be intimately involved in the cloud strategy. Because it isn’t actually a cloud strategy; it is a digitally enabled business strategy that happens to be run in the cloud.

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Your strategy for cloud needs to be led from the top

The key message here is that the approach to cloud needs to include all the different value opportunities available—growth, innovation and efficiency as well as cost optimization—and you need to be thinking about them all from the very start.

That’s why it’s so important for the CEO to be intimately involved in the cloud strategy. Because it isn’t actually a cloud strategy; it is a digitally enabled business strategy that happens to be run in the cloud. The strategy for cloud needs to be led from the top, identifying the specific outcomes the business wants to achieve, and then working back to how cloud platforms and services enable them. It’s no coincidence then those same leaders mentioned above whose companies are outperforming their peers 2:1 view cloud as a catalyst for innovation across their business.

In summary, here are my three key tips for CEOs as they look to understand how their digital and business strategies are powered by cloud:

  1. Don’t allow IT to treat cloud as a pure cost-optimization initiative. Make sure the other value drivers identified above are a central part of the strategy.
  2. Avoid linear thinking. It may be tempting to go for cost savings first. But to maximize value, efficiency and growth-focused initiatives need to be started in parallel—and within months, not years.
  3. Commit to cloud-first. When a need for new business capabilities is identified, look to buy or build those capabilities and the enabling services/infrastructure in the cloud.

Contact me if you’d like to know more about why cloud is critical to the CEO.

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Bill Theofilou

Senior Managing Director – Accenture Strategy, CEO & Enterprise Strategy Global Lead

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