Businesses are struggling to realize cloud's full potential after a boom in cloud investments sparked by the COVID-19 pandemic.
In the next year, CIOs say their companies' top priorities will include cloud investments in cybersecurity, AI and machine learning, and hybrid cloud efforts, according to a PwC survey of 524 U.S. executives released Tuesday.
But half (53%) of companies aren't realizing substantial value from cloud investments.
"Cloud creates new possibilities for competition using traditional resources and creating something new through new enabling solutions," Lars Cromley, technology fellow at Deloitte Consulting, said in an email to CIO Dive. "Organizations struggling to realize value from cloud investments should look closely at where they have chosen to make those investments."
To overcome the cloud value gap, CIOs and other stakeholders can start with a solid foundation for cloud deployment linked closely to business strategy. Specificity — and ensuring that workers have the skills for a cloud environment —are the first steps to get there.
The value gap in the cloud "is a function of the divide between progress and investment on the technical front and the real business value," Jenny Koehler, U.S. deputy advisory leader and U.S. advisory industrial products and services vertical leader at PwC, said in an interview with CIO Dive.
To close the gap, PwC recommends four actions:
Align with stakeholders on cloud strategy and value
Upskill to stay ahead of talent gaps
Address risk and build trust early
Use the cloud to advance environmental, social and corporate governance goals
"We should see at the outset some sort of a clear articulation in the mapping of the business imperative to whatever the technology … is going to be doing," Koehler said. "If it doesn't start there, it's hard, then, to measure it."
Articulating how the cloud deployments relates to business strategy requires a foundation based on quantifiable metrics, according to Servaas Verbiest, lead cloud evangelist, North America, at Sungard AS.
"If you don't map out the specific outcome that you're driving towards, and then quantify metrics that you can use as a baseline to measure track and improve upon success, then you're going to veer off course," Verbiest said.
Tying cloud deployment to business value
While the cloud holds seemingly endless possibilities to improve business outcome, tying it closely to business mission and use cases helps realize value.
"At the risk of sounding like a cliché, ensure that what you are measuring is truly important to the value you seek to deliver," Cromley said. Incentives and goals of deploying technology should be in line with the vision and outcomes of the organization.
Verbiest recommended selecting benchmarks that are quantitative, not qualitative, to track progress. For example, a technology leader could map typical transactions and mark where end users have quantifiably negative experiences.
"Then, [map] how deploying these technologies … would help provide more aggressive numbers, whether they're higher transaction volume, lower latency, or even faster speeds," Verbiest said.
Approaching a cloud deployment with vague or generic benefits can add complexity, according to Verbiest. The complexity undermines the value add and creates a mismatch between cloud expectations and reality.
The good news for technology leadership is that now the whole C-suite is on board with moving to the cloud. Executives reported a shared responsibility around cloud transformation; nearly three-quarters (74%) say they are involved in cloud strategy decisions.
To keep the momentum, tying the value of cloud deployment to business strategy still falls on the CIO.
Koehler recommends sticking with specifics when talking about cloud value. "Narrow the focus a little bit to get out of that land of the abstract," Koehler said. When discussing use cases, consider "a level of specificity down to probably a business unit level."
It also helps if members of management already have a basic understanding of the cloud.
"There's a degree of fluency that is probably required [as a] baseline [for the] management team to be able to understand the concepts and the promise for the organization," Koehler said.
Employees need cloud skills to realize value
Talent gaps are impacting the value of cloud investments. Nearly half (47%) of executives see the lack of upskilling as a barrier to cloud use, according to the survey.
Writ large, it's critical for organizations to invest in digitally upskilling their employees to build tech knowledge, according to Koehler. When it comes to the cloud, there is more specificity in upskilling options — from certifications to vendor-specific training — for leadership and employees to engage with.
"There should be a base level understanding of the promise of cloud and what digital means," Koehler said. To gain value from all of the capabilities the cloud can provide, the skills have to be in place for the long term.
On upskilling, Verbiest recommends "focusing on things that are going to drive immediate value, more of the application and more of the advanced types of certifications," rather than basic cloud skills. The skills should align with exactly what an organization aims to achieve with its cloud investments.