Most Companies Continue to Struggle to Realize Full Business Value from their Cloud Initiatives, Accenture Report Finds

Despite years of focused effort, many enterprises are still struggling to realize the full value of their cloud investments, a new report from Accenture reveals.

In its latest report, “Sky High Hopes: Navigating the Barriers to Maximizing Cloud Value,” Accenture surveyed 750 senior business and IT professionals at large enterprises across 11 industries and 17 countries. It found that just 37% of companies say they are achieving the full value expected on their cloud investments — a mere 2% increase since Accenture’s original research report in 2018.

While value realization has never been more important, only 45% of business and IT leaders say they are “very satisfied” with their cloud outcomes, just a 1% gain over 2018. Moreover, just 29% are completely confident that their organization’s cloud migration initiatives will deliver the expected value at the expected time.

Accenture’s report highlights that, when businesses have gone more heavily into the cloud, outcomes are significantly better. Forty-six percent of high adopters report fully achieving their expected cloud benefits, compared to 36% of moderate adopters and 28% of low adopters.

Businesses recognize that they need cloud technologies for speed and agility to mitigate the major challenges they are facing and to drive transformational change to create new opportunities and value. According to the report, 80% of business executives now look to cloud as a means of mitigating business uncertainty and lowering risk. In addition, 87% view cloud as a critical component of their strategy for achieving their corporate sustainability goals.

“Cloud-based transformation offers companies the most powerful way to reinvent their businesses, unleash the expertise and creativity of their people, enhance their sustainability efforts and create new stakeholder value,” said Karthik Narain, global lead, Accenture Cloud First. “But the reality is that not every company is unlocking the full potential value of the cloud. In fact, our newest report shows a surprisingly small two-year improvement in returns on corporate cloud initiatives, suggesting that a more thoughtful and holistic approach is needed. Competing in the age of COVID-19 and beyond requires that companies implement a cloud-first strategy, in which every element of their business leverages the power of the cloud, right now.”

The research also examines what may be holding businesses back when it comes to driving their cloud agendas and achieving their goals. “Lack of skills” was most frequently included in CEOs’ top three perceived barriers (54%). “Security and compliance risk” was predominant among all respondents (46%), followed by “legacy infrastructure & application sprawl” and “misalignment between IT and the business” (both at 40%).

The findings also show that CEOs have markedly different impressions of cloud results and concerns than fellow C-suite leaders and high-ranking company officials: 54% of CEOs are completely confident in their organizations’ ability to deliver cloud initiatives with the expected value at the expected time, versus 34% of CIOs and only 28% of CFOs.

“Our research findings point to the complexities involved in successfully executing cloud migrations that produce the anticipated business value. The good news is that by taking a rigorous, outcomes-centric approach to devising a customized cloud strategy, partnering with the right experts and addressing challenges outside of the technology itself, such as upskilling their people to be more productive, businesses can achieve the results and return on investment they’re seeking,” Narain added.

To extract the full business value of cloud technologies, Accenture recommends that organizations adopt fundamentally new ways of working, shifting to new operating models and developing new roles and skills. Four key areas for companies to address include:

Business value focus: develop an optimal cloud strategy anchored to comprehensive economic business cases to identify revenue upside and cost efficiency opportunities while aligning goals and putting company leaders on the same page.

People and culture change management: implement new upskilling and talent readiness programs, along with new operating models, to help transform and enhance how people work so they can better meet rapidly changing needs.

Data and AI: Unlock industry- and function-specific data insights and intelligence trapped in legacy systems with the power of cloud data models.

Partnering for success: Leverage the skills and experience of strategic partners to expand and enhance the organization’s existing capabilities. Cloud-managed services are often an option for companies looking to access the right skills while maintaining cost efficiency.