While investments in cloud migrations have surged, organizations now must shift their focus to an ongoing journey in order to achieve expected outcomes at higher rates, according to new research from Accenture.
The report, titled “The race to the cloud: Reaching the inflection point to long-sought value,” is based on proprietary research as well as a global survey of 800 business and IT leaders. Building upon similar research Accenture conducted in 2020 and 2018, the report identifies where companies are on their cloud journeys and how much value they’re getting from their cloud investments across five areas: cost savings; speed; business enablement; improved service levels; and resilience/business continuity.
“Companies have raced to cloud and they see clear value there, but may be encountering harder terrain than they expected. Getting the full value potential out of the cloud requires a mindset shift — a focus on the cloud as a continuous and constantly evolving journey, not a destination,” said Karthik Narain, global lead of Accenture Cloud First. “It’s a commitment to continuous reinvention — learning new skills, embracing new technologies, with cloud strategies that optimize operations, accelerate growth and open up new business models.”
Accenture’s research revealed the following four major findings:
Cloud commitment has surged. Cloud is now fundamental to achieving strategic business goals, as 86% of companies report increasing the scope and volume of their cloud initiatives since 2020. Additionally, the vast majority of cloud users now have hybrid cloud environments (public and private) and a large percentage use multiple public cloud providers (multi-cloud).
Organizations achieving greater outcomes are the ones further along in their cloud journeys. Heavy adopters continue to fully achieve their outcomes more frequently, 47% on average, than medium (36%) or low adopters (21%). Not surprisingly, higher achievement levels also correlate with greater use of third-party managed services. Almost half (45%) of companies fully achieving their outcomes are using managed services to a great degree.
Ambitions expand beyond cost savings as the cloud journey continues with more complexity. Companies are investing more in the cloud, but nearly 7 in 10 (68%) still consider their cloud journeys incomplete. Having picked the low-hanging fruit — i.e., with lifting and shifting an application from an on-premise host to a cloud service — they are now migrating more complex and business-critical systems but haven’t yet realized the full value of their investments. Cloud environments are growing more complex. Businesses that consider their cloud journeys complete (32%) are putting themselves at risk in a dynamic market environment as those that stand still get left behind.
Stubborn barriers from past years remain. To unlock further cloud value, companies must move more complex and business-critical systems. When asked to identify the top barriers to achieving value from [their] cloud [investments], respondents cited “security and compliance risks” and “complexity of business and operational change,” with 41% of respondents placing them in their top three barriers overall. “Legacy application modernization” was close behind, with 39% of respondents listing it as their top three barriers.
“The challenge ahead will be in how companies can build a strong digital core. The opportunity ahead will be in how we can help our clients use the cloud as their operating system to bring together data, AI, and applications, optimise their operations, and accelerate growth,” Narain said.
With myriad technologies and greater complexity, Accenture recommends five key practices for companies to unlock more cloud value. Organizations should look beyond technology adoption and change the way they think and act. Pursue business and industry advantage. Focus on designing and operating in the Cloud Continuum to combine the vast capabilities from public and private to the edge and everything in between. This includes transforming IT estates and complex business-critical systems and tapping into trapped data for total enterprise reinvention. Most importantly, organizations also need to reimagine their operating model and talent to thrive in the Cloud Continuum. Skilled architects are essential to navigate the plethora of technical decisions. Finally, managing the dynamic, variable costs requires new forecasting mechanisms and processes. It’s paramount to master cloud economics to optimize cloud spend.