We are nearing the point where businesses that haven’t fully embraced the opportunities presented by the cloud will struggle to survive in the face of competition from those that have.
“The inflection point is coming,” says PwC Technology Consulting partner Robert Byrne. “We are approaching the stage where start-ups will be cloud native and better able to adapt and avail of market opportunities than established organisations. Businesses which are not cloud native or not advanced in cloud adoption will find it difficult to compete.”
But organisations are beginning to appreciate the full value of the cloud.
“People’s understanding is evolving, as is their approach to getting value from the cloud,” Byrne continues. “When they started off using it, the main attractions were cost reductions and improved efficiency. This was successful to a point, but they were certainly leaving value on the table. They were missing out on the opportunities which the cloud offers for business transformation.”
Huge innovation opportunity
This is a critical point, according to PwC Technology Consulting director Marc Hanlon. “Cloud adoption is not just an IT play, it’s a whole business play. The cloud helps organisations to become more agile. It enables rapid scaling and helps businesses launch new products and services very quickly. New product development used to take months and years. Now it’s down to weeks and months.”
The cloud is also a key innovation enabler. “Technologies like artificial intelligence [AI], machine learning, and internet of things [IoT] are all available in the cloud,” says Hanlon. “Businesses can access them on a pay-as-you-use basis with no upfront capital investment. Cost is no longer a barrier to innovation.”
These are transformative technologies, according to Byrne. “They can allow businesses to innovate as much as they want within reason. The only limiting factor is their ambition and ability to change.”
Hanlon points out that cloud adoption is already widespread due to the use of cloud-hosted applications. “The cloud covers so much, including software as a service [SaaS] applications, which we see being used in areas like HR and finance. Sales and marketing is huge with platforms like Salesforce and Microsoft Dynamics and so on being cloud based.”
The explosion in the use of communications and collaboration platforms during the Covid-19 pandemic is another example of cloud adoption.
“Many organisations wouldn’t have been aware of Zoom before the pandemic – now it’s a verb,” says Byrne. “It was the same for usage of Microsoft Teams, which more than doubled in the first year of the pandemic. The old way of video-based collaboration required expensive infrastructure and cameras and special facilities for people to use them. Cloud-based services replaced all this to give us the functionality we need and the ability to access these services from anywhere.”
Still, Hanlon urges caution and advises organisations not to rush into decisions.
“You need to do your due diligence before committing to anything. It may be best to start with a couple of pilot projects and then pause to look at what the business can do to address the opportunities presented by the cloud in a considered way. This will allow you to look at where the best value lies and that can differ depending on the nature of the organisation.”
And that value may come from an unexpected source. “There are a lot of entry points to the cloud journey,” he continues. “PwC recently produced a global CEO survey which gives us a good sense of what’s going on in the minds of business leaders. ESG emerged as a high priority for businesses. Cloud-based data analytics and reporting platforms are very powerful and they can offer solutions to help organisations meet their ESG obligations.”
And there are many other use cases. These include the use of chatbots for customer service, but people want to have natural language conversations.
“That requires AI technology, but most organisations don’t have the resources to do that themselves,” says Byrne. “With the cloud you can start out as small as you like without having to worry about significant investment infrastructure – cloud services from providers such as Microsoft Azure, AWS or Google look after that for you.”
A mindset change
Availing of those benefits and opportunities requires more than just a change in strategy. “What’s needed is a mindset change,” says Hanlon. “Organisations need to adopt a start-up mentality. The cloud can deliver the same benefits for large companies as it does for start-ups; the challenge is the mindset. Businesses need to think about the opportunities, not the threats.”
Established companies need to go on a journey of change, according to Byrne. “Awareness is the first step on that journey. What do we need to change? Where do we want to apply cloud solutions and to what end? That will evolve and change over time and the number of internal people who evangelise for the cloud will expand as well. Transformation needs to be thought out at every level. It can’t be done on a piecemeal basis.”
And the stakes couldn’t be higher. “Organisations that have broadly and significantly adopted cloud already have a considerable competitive advantage,” Byrne points out. “It will come to a point where the majority of companies will be using it in a significant manner and those that do not will struggle. Recognising that, some clients seek support in terms of starting their cloud journey while others in terms of growing their current cloud footprint to help them be successful in the years ahead.
“It’s not easy, and it’s not quick,” he continues. “But if you do it right, the rewards for the broader business can be big. Cloud technologies are a key enabler of business success and can’t be ignored. It’s not a ‘one and done’ project. It needs strong and ongoing commitment at the very top to make those potential rewards a reality.”
[ For more information, see www.pwc.ie/techimplementation.Opens in new window ]