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Reaching full business value from cloud investment: PwC

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Though companies have been quietly embracing cloud computing for years, 2020 proved emphatically to boards and C-suites just how vital the cloud is to survival and the pursuit of new opportunities. When the COVID-19 pandemic shuttered economies, businesses quickly discovered that they needed the cloud’s Web-based computing services to enable employees to work remotely, to shore up fractured supply chains, and to provide new digital services to consumers who couldn’t leave their homes.

Contrary to its marketing buzz, the cloud is not a single technology or one-stop money-saving solution, but rather a collection of computing software and data services that can be accessed via the internet instead of residing on a desktop or internal servers. These services include applications as simple as email or as complex as customer relationship management software, and afford companies massive amounts of computing power needed to develop and test new proprietary applications. Because cloud computing platforms are “always on,” they are ideal test beds for experimenting with and deploying new technology solutions, incorporating advanced analytics, automation, blockchain, quantum computing, augmented and virtual reality, and 3D printing. This makes the cloud a powerful strategic tool—not just a tactic.  

Yet despite the acceleration of cloud adoption across the business landscape, most companies are barely scratching the surface of the cloud’s vast potential. According to a PwC survey of C-level leaders in the United States, released in 2021, 53% of companies have yet to reap substantial value from their cloud investments.

This unrealized value is significant, but it only begins to speak to the cloud’s untapped potential to propel digital business strategies. As 2020 showed, the cloud isn’t a one-and-done IT project. Just as operations and strategy need to be agile and adaptive, so does your cloud blueprint. Staking out this new ground requires a well-defined, value-oriented strategy that links technology and business teams in a common pursuit of bold outcomes.

Take the case of one global payments company. With aging data center systems soaking up IT dollars, the board had assumed a cloud transformation would yield significant improvements and value-creation opportunities. Startups using cloud technologies were making inroads into the company’s customer base with a range of digital offerings, so a move to the cloud made sense. But progress came either slowly or not at all. The company needed to reset.

We call this “the cloud hump”—a significant ramping up of cloud spending followed by a forced pause to figure out a new path forward. As one executive we interviewed cautioned us, if organizations think the cloud is mostly about moving data to slash IT costs, they have a problem. Rather, the executive says, the cloud should be about reconceiving the way business operates. Flash forward to today, and the CEO, the board, and the CIO of that global payments company are reviewing a combination of cloud technology and organizational and strategic changes that will attempt to better connect core IT operations to business change.

But making the pivot from tactical to strategic is not easy. Through our work with companies around the world, we identified seven mission-critical factors for closing the cloud potential gap. In what follows, we look at cases of companies, some of which stumbled in early efforts and others that have gained, or are starting to gain, solid footing on their way to seizing the cloud’s potential.  

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