How to create value through cloud computing

Four ways to deliver better outcomes

Dr. Konstantin Rubinov
Manger Digital Intelligence, PwC Switzerland

Over the past two decades since Amazon Web Services launched the first public cloud in 2002, the technology has evolved to become an integral part of corporate strategy and day-to-day business. In the latest PwC US Cloud Business survey, 92% of 524 US executives said that their companies are “all-in” on cloud or have adopted it in many parts of the business. More than half of the respondents see cloud as a strategic platform for growth and innovation.

On the flip side, only some companies have been able to translate their cloud investments into substantial added value. Based on the results of our survey, we have explored why these investments have failed to deliver and offer some advice on how that value gap can be closed.

Ever wondered how your cloud journey compares to others?

By taking the survey, you will be able to measure your company against others, find out more about trends and other executives’ cloud strategies, and tap into collective intelligence from business leaders in the US and Switzerland.

Benchmark your cloud potential

Many companies have already embarked on their cloud journey. We asked them what business outcomes executives are seeking through cloud computing. The answers across six industry sectors include improved resiliency and agility (34%), better decision-making (34%), product and service innovation (33%) and creating better customer experiences (29%). However, the study also shows that 53% of the executives seeking such outcomes have yet to realise substantial value from their investments.

C-suite leaders are very involved in terms of the cloud, with the survey showing that even board members see themselves as having a considerable role. The involvement of business leaders is both a huge opportunity and a distinct challenge when it comes to reaping value from the cloud platforms.

When asked how their companies measure cloud value, it becomes clear that among executives there is no prevalent definition of cloud value and how it could be quantified. Some equate it with faster innovation or improved resilience while other executives focus on increased revenue. Accordingly, 49% of business leaders consider this inability to measure value as a key barrier to realising it.

Fostering a shared vision of cloud value

To make use of the potential the cloud offers, senior executives must work together and make strategic business choices about how and where cloud computing will bring value and a competitive advantage. What digital and technological capabilities should be developed, how do we want to interact with our customers and how should the company differentiate itself from its competitors?

It is also important to establish clear expectations regarding what can be achieved with cloud technology. Our survey showed that there is substantial room for improvement in helping executives and other leaders gain more knowledge about the cloud and how it affects the business. Upskilling programs for C-level executives can help foster a shared understanding of the possibilities and limitations of cloud computing. This also includes understanding that the cloud represents a huge opportunity to rethink how work is done and how to increase productivity. How can an agile way of working be introduced to work processes and operations? How can collaboration be increased? How can operations be revamped in order to harness the advantages of cloud computing, thus avoiding replicating how business has been done in the past? Having clear answers to such questions will be crucial for delivering new products, services and experiences quickly.

After all, utilising the cloud is a transformational journey that has implications for the business and operations of the company as a whole. In order for the cloud transformation to be successful, it is important for executives to be upskilled, cross-functional collaboration to be fostered, a clear vision for the journey to be set and both business and technical outcomes to be defined. Taking advantage of the cloud requires the whole organisation to pull in the same direction.

The digital talent divide doesn’t just affect tech specialists, but also employees and business leaders who have the skills and mindset to thrive in a cloud-empowered world and to propel innovation. Unsurprisingly, 52% of the executives who participated in the PwC US Cloud Business Survey regard a lack of tech talent as a moderate or extreme barrier to realising cloud value. In Switzerland, according to the results of PwC’s 24th Annual CEO Survey, almost two thirds of CEOs are concerned about the availability of key qualifications.

Attracting and retaining cloud professionals presents a challenge to current workforce plans. HR officials must reimagine their strategies and structures to create a new workforce ecosystem.

When asked in the US Cloud Business Survey about the most significant impact of the cloud transformation on their people strategy, 55% of CHROs mention changes to business processes and ways of working, followed by the ability to attract (44%) and retain (42%) cloud-related talent, and worry about being able to upskill people to adapt to the new ways of working that the cloud demands (40%).

Encouraging a digital mindset

Upskilling is one of the means for companies to create the workforce needed to thrive in a world which is increasingly influenced by the digital economy. The COVID-19 crisis accelerated this tendency and with it the demand for such programmes. Many Swiss CEOs are planning to increase their long-term investment in leadership and talent development as a result of the pandemic.

To generate sustained outcomes through upskilling initiatives, companies should not only concentrate on the development of tech skills but also focus on new ways of working and on creating lasting individual pathways that give talent the chance to evolve. The basis for a successful transformation is the development of a digital growth mindset, which in turn is best achieved by engaging employees throughout the journey. It comes as no surprise that when upskilling is done right, it is also highly effective in boosting productivity and improving culture and employee engagement. Upskilling the C-suite is equally important for creating a shared vision of business goals and the opportunities for increasing productivity in their respective areas of responsibility.

Digital transformation increases the efficiency of existing business models and paves the way for innovation. But what about the associated security and business risks? While only 17% of C-level executives who participated in the PwC US Cloud Business Survey define cloud as a security and business risk that needs to be addressed, at least 50% perceive this risk as a significant barrier to realising cloud value. Especially for some industries, such as the financial industry with its commitment to protecting customer data and assets, cloud computing has caused risk concerns. Addressing such apprehensions early on is important for building trust in cloud technology.

Surprisingly, only 17% of CROs and chief audit executives in the United States said that they are involved in their company’s cloud project at the planning phase. 29% of business leaders confirmed that security and compliance are considered when assessing technical requirements and 37% said the project stage in which business requirements are assembled.

Therefore, considerable untapped potential in realising cloud value can be found by making security and risk considerations an integral part of the cloud strategy right from the beginning. This also prevents inefficiencies and unnecessary spending. Furthermore, it helps to avoid feeling overwhelmed during the later stages. Aspects that need to be addressed, and which may change over time, can range from shared responsibilities between cloud provider and company to data protection, industry-specific compliance requirements and cyber security.

Building trust in cloud transformation

For a successful cloud transformation, it is important to have the trust of employees, investors and customers alike. Transparently and proactively informing stakeholders about a company’s cloud transformation on a regular basis can help to establish that trust and gain support. Executives can, for example, provide insights on Investor Day, as part of their annual reporting suite or through internal and external communication activities. Some companies also issue trust-based attestation reports that can provide comfort to customers that a new product or service has been thoroughly reviewed and certified by a third party. 32% of business leaders who plan to innovate their products and services through cloud computing over the next three years said they might consider this approach.

Consumers and investors have increasingly high expectations when it comes to sustainability. People have become more sensitive to ESG-related topics, and want more transparency about products and provenance, an organisation’s environmental impact or social responsibility. Technological innovation can help companies to measure and better control their environmental footprint through cloud-based data management and reporting. Real-time data can increase transparency and help monitor performance, while standardising and automating ESG reporting across different functions and divisions increases efficiency and consistency. This potential can also support companies in their effort to adopt more sustainable corporate practices.

Cloud computing is often a greener option for companies, as they can reduce their energy consumption drastically by moving their data from on-site centres to the cloud. This is why many cloud providers are increasingly focusing on providing green services by reducing their own carbon emissions. This is an important trend, as these emissions are part of a company’s Scope 3 reporting, which focuses on activities from assets not owned or controlled by the reporting organisation. Cloud transformation can help a company to deliver net zero at pace.

Assess how the cloud is contributing to your company’s growth and operations

Digital transformation has become a game changer for companies and cloud computing has been central to that change. As there is no go-to playbook for a successful cloud transformation, insights collected by PwC provide companies with a competitive advantage. PwC Switzerland’s Cloud Assessment allows you to get ahead of the curve and helps you in creating sustained outcomes through cloud computing. By taking the survey, you will be able to measure your company against others, find out more about trends and other executives’ cloud strategies, and tap into collective intelligence from business leaders in the US and Switzerland.

Benchmark your cloud potential