Clearly, cloud is essential, yet some sky-high hopes remain out of reach

COVID-19 sent cloud adoption into overdrive; its role in digital transformation is uncontested, but just 37% of companies say they've realized the full potential of investments, according to Accenture.

Cloud.

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The enterprise has gone all-in on cloud initiatives, according to a new report from Accenture, with 90% of companies adopting the cloud. When COVID-19 swept across the country,  investments soared, but some businesses are still struggling with realizing its full potential, Accenture found, thus unintentionally crippling the needed digital transformation. Only 37% of companies said they achieved the full value on their cloud investments, a mere 2% bump up since 2018. 

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Accenture's report stated that cloud migration can longer just be "an option," but "a mandate." Despite the imperative, it does not necessarily mean adoption is easy, the firm said.

Anyone in the enterprise facing stumbling blocks as they race through a cloud-first journey should know, Accenture emphasized, they are not alone; it is a confusing and complex route. Multiple dimensions—including rethinking strategy, tech, skills development, business processes, and organizational design—are critical elements. 

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Accenture surveyed 750 senior business and IT professionals at large enterprises across 11 industries and 17 countries  to pinpoint how far they are advancing in terms of the business value achieved from cloud initiatives. 

Being on the cusp of the transformative still left a majority of IT professionals "not highly" satisfied. Only 45% of business and IT leaders say they are "very satisfied" with their cloud outcomes. Just 29% are "completely confident"  their business' cloud-migration initiatives will deliver the expected value at the expected time.

But those who commit more enthusiastically to the cloud see better results, as the report stated. "Businesses that have gone more heavily into the cloud receive better outcomes:" 

  • 46% of high adopters report "fully achieving" their expected cloud benefits 
  • 36% of moderate adopters report "fully achieving" their expected cloud benefits 
  • 28% of low adopters report "fully achieving" their expected cloud benefits 

High adopters outperformed low adopters, significantly in resilience/business continuity (44% vs. 22%), service levels (47% vs. 26%) and speed to market (52% vs. 33%), and 55% (vs. 43% of moderate adopters, and 35% of low adopters) are "very satisfied" with their cloud results, yet 54% of the same high adopters admit they're not getting the results they hoped for.

Key report findings

  • More than half (52%) of high adopters report failures as they try to achieve the expected value from their cloud initiatives.
  • Those who cite they're "very satisfied" with cloud outcomes achieved to date did not see much change: 45% in 2020, vs. 44% in 2018. 
  • Only 29% of respondents said they are "completely confident" that their business' cloud-migration initiatives are going to deliver the expected value at the expected time.
  • CEOs, fellow C-suite leaders, and high-ranking company officials are often at odds regarding cloud results, and they have markedly different impressions when presented with the results.
  • 25% of organizations "always or usually" run into unexpected complications during cloud-migration initiatives.
  • Businesses that use  third-party managed services "to a great degree" on average reported achieving the full benefits of their cloud initiatives (48%) more frequently than those that do not (35%).

Cloud blockers

Barriers noted most frequently by respondents were

  1.  "security and compliance risk"
  2. "Legacy infrastructure & application sprawl" 
  3. "misalignment between IT and the business" 
top-3-barriers.jpg

Image: Accenture

The value of cloud initiatives: Most companies (83% on average) report fully or mostly achieving  expected outcomes, a 5% improvement over 2018's result. 

Uncertainty, risk and sustainability:

  • 80% of business executives look to cloud to mitigate business uncertainty and to  lower risk to a great or moderate degree.
  • 87% of business executives look to cloud as a critical component to achieve sustainability goals to a moderate or great degree.

CEOs in general had a higher level of confidence in cloud's ability to help mitigate business risk and support sustainability "to a great degree" with 49% and 66%, respectively. COOs proved to be more skeptical with just 34% and 28% indicating "to a great degree."

Reaching expectations

The enterprise must consider itself "cloud first" and realize that to achieve the full potential of cloud, it must know that it requires much more than technology, it requires companies to develop and implement new ways of work, be comfortable with a shift to new operating models, and develop new roles and skills. Accenture identifies four areas for businesses to address: 

  1. Business value focus
  2. Workforce and culture change management
  3. Data and AI
  4. Partnering for success

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