Migration success depends on connecting the cloud strategy to the digital transformation of companies. Despite constantly reiterated, benefits such as bringing skills to market faster, innovating more quickly, and scaling more efficiently and with less risk are only felt by organizations that can align their cloud strategy with digital transformation.
And to date, despite the growth of providers and evidence that such benefits are possible, few organizations are achieving this – at least at the pace and scale expected and anticipated.
According to McKinsey’s research, for example, only 10% to 15% of applications are in the cloud among large companies. These applications are not the most critical, which continue to be hosted in traditional data centers. According to Accenture, only 37% of companies say they have gained tremendous value from their cloud investments.
This means that, while promising, successful cloud adoption is not straightforward. For us, one of the crucial factors for success is the cloud strategy, which will connect adoption to the highest level of the organization’s digital transformation.
Among the problems linked to the lack of a holistic cloud operation plan, which places its adoption within the scope of a transformation of business technologies, is adherence to traditional implementation models, limited adoption of isolated initiatives, such as application hosting, and lift and shift migration.
Such problems ultimately make any further progress to the cloud impossible. Business leaders see no benefit, IT fails to build the automation or reference architectures necessary for good service use, and the costs and risks increase considerably.
Cloud Strategy: The Pandemic Factor
As Accenture says, the cloud is the foundation of digital transformation. If before, organizations spent lots of money and energy buying servers and building data centers, today, the cloud generates ROI.
In 2020, with the pandemic, this radicalized. Some say that the pandemic was a unique moment in digital transformation. In fact. And that includes cloud adoption, whose engagement is proving vital.
However, all this engagement came with a lot of velocities, which means that the strategic element, which would connect a cloud adoption or expansion to the enormous scope of digital transformation, may have been overlooked.
Now organizations need to deepen the relationship of their cloud strategy to the business, connecting it to their digitalization; otherwise, their investments will not generate as much value. As research by Accenture shows, the value of the cloud to the organization increases along with increased adoption. While only 28% of low adopters see the expected benefits, that percentage jumps to 46% among broad adopters.
Aligning Cloud Strategy With Digital Transformation
For McKinsey, the path is to focus investments in business domains where the cloud can increase profits and improve margins, superior technology, and models that align with business strategy and risk limits and develop and implement an operations model oriented around the cloud.
For this, the organization must evaluate opportunities in the cloud to meet the organization’s demands, have a broad view of the cloud market and solutions, and use a methodology to create a cloud strategy.
How do these initiatives make operations?
The support, first of all, from the CEO. Will be fundamental to creating a cloud strategy aligned with the digital transformation.
That’s because it is typical for the prioritization of features that the business needs now to overlap with investments in infrastructure that will allow the company to add features more quickly and easily in the future.
CEOs can help other leaders recognize that infrastructure investments represent a source of competitive advantage, not just another cost to manage.
Working Together With The C-Level
CIOs will not make a cloud strategy aligned with the digital transformation of the business alone. Even with the support of the CEO. As McKinsey rightly puts it, the transition to the cloud is a collective and orchestration issue.
Therefore, CIOs will need the active support of the rest of the management team. Otherwise, they will make decisions limited to IT parameters and create significant problems for the business areas.
Leaders must design an operating model that reflects and supports this integration of systems rather than individual technologies.
Decision-making will involve:
- Establishing a budget model.
- Developing an operating model of business technologies.
- Establishing the means of executing this.
There are no correct answers to these questions. Organizations need to make decisions based on the type of risk they want to take.
Also Read: How Can Cloud Software Reduce Costs?