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 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 cloud requires a mindset shift - a focus on 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:
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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).
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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.
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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.
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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 in 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, and optimize 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 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.