No Match Found
As the role and influence of cloud technologies expand, we are entering a new wave of change where cloud adoption is having a greater business impact, and transforming how people live and work.
We’re seeing organisations exploit the cloud for an increasing number of distinct but related business priorities: greater security and resilience, improved cost efficiencies, faster innovation, development of new tech-powered services and products, and increased agility, to name a few. Cloud has become the technology reshaping commercial and operational strategies. It’s also the reason why digital-first businesses are outperforming traditional competitors in growth and profitability.
Understanding the possibilities - and limitations - of technology has become critical for business and commercial success. Organisations now need to arm decision-makers and business leaders with knowledge of the technology incorporated throughout the business, and what it means. Certainly, they must look to at least understand - and be able to articulate - the commercial value of any technology adoption or strategy.
To drive that initiative, there needs to be a nominated individual responsible for leading on technology and elevating its role at a senior leadership level, ideally with a seat at the executive board. But what does that role entail and what are the key considerations that must be made?
As cloud technologies continue to evolve and advance, we’re passing an inflexion point where cloud has moved beyond the world of ‘internal IT’ to become an enabler of agile, responsive, real-time business transformation and commercial growth. For executives, regardless of role, this can be both empowering and challenging.
This means implications across the boardroom, with cloud opening up options to build competitive advantage. Roles such as Chief Financial Officer, for example, will need to upskill their technical knowledge, to understand cost variable implications and change how they evaluate technology expenditure. Chief Strategy Officers should look to understand how the cloud can enable faster innovation. And these are just two of the many considerations across the c-suite.
These outcomes require the commitment of the entire business to unlock value across every function and for every customer.
Despite the importance of this understanding, surprisingly, expertise in how to harness the power of technology continues to be in short supply around the board table. According to MIT Sloan Management Review, just 7% of large companies have digitally savvy executive teams. This is no longer a ‘nice to have’ requirement - organisations that have embraced technology and transformed via replatforming of their business are outperforming peers on revenue growth and valuation by over 48%.
PwC’s research indicates that 74% of business leaders are engaging in their company’s cloud strategy as its role expands outwards from traditional IT. But there’s much to do, with only 56% of executives viewing cloud as a strategic platform for growth and innovation, and 53% yet to derive substantial value from their cloud investments.
This value gap has several causes, including a shortage of talent in and beyond the technology team, and a limited understanding from executives about how technology can power their business. A digitally literate C-suite has a material impact on company performance, significantly improving revenue, profitability, and operational efficiencies, as well as customer and employee satisfaction. In turn, this can provide a platform to improve operating models: refreshing culture, upgrading skill-sets, driving technology adoption and increasing attractiveness to digital and cloud talent.
Several companies are now embarking on major programmes of education across the C-Suite and other top executives. One bank, for example, ran a tailored education programme using content from cloud software companies, consultants, market analysts and other cloud-native organisations to share insights and learnings. A further characteristic of success is executive curiosity, a willingness and desire to be continually learning and investing the time to do so.
Organisations need to invest in upskilling leadership if they are to set their sights on accelerated growth, and understand how to harness the power of technology.
Achieving the full value potential of cloud demands change across the organisation, frequently described as ‘enterprise-wide transformation. To do this, executives from across the business must agree on a company-wide ambition for change, understanding how every decision impacts each business division and department.
For many - especially more established organisations with years of legacy technology - the pace of change will demand a bigger and bolder vision that may even reinvent the shape and anatomy of the organisation if they are to replicate the benefits of a digital-native company while retaining competitive advantages such as goodwill, trust, and a loyal customer base. Leaders should look to revisit organisational structures and governance mechanisms, where possible flattening traditional hierarchical structures and investing in cultural change to empower employees that are closer to customers, products and services.
To technology-savvy organisations, cloud technologies provide a toolkit for continuous idea generation and competitive advantage. They frequently test ideas for better customer experiences, changes to products and services, or find ways to gather deeper insights into their customer needs to improve effectiveness.
Perhaps uniquely, experimenting with cloud is much easier than organisations think.
In working with software companies, organisations are opening themselves up to the full value of investments in the cloud and the range of ecosystem software solutions available. This means organisations can, for example, experiment with virtual reality, blockchain, artificial intelligence, or reuse insights from others to get more value from their data, with over 200 cloud services available immediately on a pay-as-you-go basis.
While organisations dealing with legacy technology infrastructure spend well over 50% of their technology budget on just keeping the lights on, tech-savvy companies are investing in creating the right business and cloud laboratory environments to innovate at pace. These ‘cloud labs’ simplify and encourage experimentation and innovation, with ideas easily and efficiently tested and reviewed. Some organisations are even using cloud labs to stretch boundaries and create the cloud-native ‘model company of the future’.
Although such cloud labs challenge conventional governance and decision-making, organisations that leverage them can accelerate decision-making, break false preconceptions, cut through bureaucracy and empower employees to outpace competitors.
Customer-centricity is frequently talked about more than it is delivered, with organisations built on decades of product-centric or internally focused thinking. Companies that embrace the cloud and actively invest in driving more agile ways of working are better able to meet customer needs and respond quickly to changing market conditions. They lower the cost of learning and turn data - more readily available in cloud platforms - into actionable insights. Collectively, these accelerate time to market for great ideas.
Organisations looking to become truly customer-centric should start by understanding what their customers want and need at a very granular level and work back from there. That begins by using data and other insights to understand your customers' requirements, and where they feel frustration or pain. It’s not only about being close to customers and asking them what they want, but deeply understanding their situation and context to invent on their behalf.
Technology now permeates every function, product, service and opportunity. It’s now a driving force shaping business strategies and industry segments.
As tech and IT as a function plays an increasingly vital role in delivering competitive advantage, this demands change to the role of the person responsible for leading on technology. They must be equipped to bring the skills and leadership to communicate, influence and guide a tech-savvy business agenda and strategy, offering compelling advice and counsel on the power and possibilities of technology.
Beyond this, organisations need to establish learning cultures where everyone from the top down is continuously building a deeper understanding of what makes them competitive and how technology enables this, investing the time to keep abreast of the latest developments.
It's time to place technology - and cloud transformation - at the heart of your business strategy. To discuss anything raised in this article, please get in touch.
Since its launch in 2006, the Amazon Web Services (AWS) cloud has become a market-leading foundation for business transformation. It’s heartening to see from a 2021 survey of 10,000 business leaders that 64% have accelerated their journey to the cloud and, on average, sped up their digital transformations by 29 months.
PwC UK is just one of these organisations benefiting from a strategic and commercially focused adoption of technology. Not only has it worked with clients to adopt the cloud, but it has also migrated its own business processes and applications. Over the last few years, it has built on this foundation, accelerating the creation of products and services, all powered by cloud technologies.