Accenture Cloud Outcomes Research: A Lot of Pandemic Fallout to Address
While cloud computing has proven vital, organizations are getting “insufficient” value from it.
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Nine in 10 respondents in Accenture’s report said they have achieved some degree of expected outcomes with regard to their cloud deployments. However, attaining full achievement remains out of reach. The percentage of “full achievement of expected outcomes,” as Accenture phrased the question, climbed to just 42% in 2022 compared to 37% in 2020.
“It’s not time to rest on our laurels, especially with the same stubborn barriers standing in the way: security risks, complexity, lack of skills, legacy systems and more,” the report reads.
Here’s an overview of some of the findings in Accenture’s new cloud report:
• Eighty-six percent of companies increased the volume and scope of their cloud initiatives over two years.
• As noted on the previous slide, 42% of surveyed organizations, on average, report fully achieving expected cloud outcomes, up from 37% in 2020.
• Business enablement has risen to become the most fully achieved outcome at 45%.
• Top barriers to cloud value are “security and compliance risks” and “complexity of business and operational change,” with 41% of respondents placing those in their top three overall.
• “Legacy application modernization” follows closely at 39%.
• While 32% of companies see their cloud journeys as complete and are satisfied with outcomes, the remainder (68%) are still progressing on their cloud journeys.
The next slide shows which outcome remains the most elusive and how cloud partners can play a role in resolving that challenge.
This probably won’t shock many readers: Cloud cost savings remains the most elusive of outcomes. Only 39% of respondents told Accenture they’ve achieved their expectations in this department. And that marks a mere two percentage-point increase over 2020, according ot Accenture.
“While this is perhaps the most frustrating finding for many, as cost-effectiveness was one of the early selling points for cloud, it may not be unexpected,” the report reads. “The lag can be attributed, at least in part, to the rapid investments that most have undertaken.”
The time has come, then, for partners to step in and help customers manage their cloud expenses (actually, one could argue this course of action is overdue). This will grow even more important as IT environments become more complex, as Accenture noted. That’s because as complexity ramps up, costs do too, and they quickly soar out of control.
The majority of companies Accenture surveyed — 86% — said they have greatly increased the volume and/or scope of their cloud initiatives since 2020.
As channel partners well know, COVID-19 underpinned those deployments, and its ripple effects continue to propel continued implementations. Pandemic concerns still abound. As a result, many organizations remain supportive of remote work (although many have adjusted to a hybrid model), and the world has yet to solve the supply chain problems that started with COVID-19, as well as higher market volatility and the threat of a recession.
Even with those macroeconomic issues at play, organizations are pursuing digital transformation — of which cloud is a key enabler. In addition, that 86% of companies ramping up their cloud initiatives since 2020, 68% of Accenture’s respondents this year call themselves “heavy adopters.” That compares to just 11% in 2020.
Where a cloud resides is critical to an organization’s strategy. To that point, here’s what Accenture found when it comes to public, private, hybrid and multicloud models of cloud computing:
• On average, 50% of workloads are committed to the public cloud, compared to 35% in early 2021.
• Private clouds serve as the destination for 32% of workloads on average (including both private and virtual private models).
• Hybrid and multicloud now represent “the new normal,” according to Accenture.
• Almost all cloud users report using both public and private clouds (resulting in a hybrid configuration), as well as several public cloud providers (for a multicloud approach).
Even so, a substantial number of workloads remain on legacy systems, Accenture said. That finding points to significant opportunity for cloud channel partners to migrate those applications to modern platforms.
If you’re a cloud managed service provider looking for some validation, here it is: Accenture found that organizations who leaned on third-party managed services achieved higher levels of cloud computing success.
In fact, almost half (45%) of companies fully achieving their desired cloud outcomes are using managed services “to a great degree,” the report reads.
There’s another reason why cloud MSPs bring value to organizations: the ongoing IT skills shortage. More than one-third of respondents (36%) told Accenture this problem ranks as a top-three concern. And that figure did not change from the 2020 survey.
Cloud MSPs just have to make sure they can close the gap for their clients because channel partners, too, are struggling to hire and retain IT talent.
Smart companies (often guided by their smart channel partners) are not just looking at cloud for the sake of cloud. Rather, they’re considering what it can and should do for them on a strategic level. Accenture calls this “business reinvention.” And the biggest area where organizations want to invest? “Enhanced data analytics and AI,” Accenture says.
To that point, 43% of respondents intend to fund a practice dedicated to enhanced data analytics and AI. After that, they’re prioritizing the modernization of legacy and mainframe apps (37%). Next up comes initiatives to upskill/reskill talent to better use cloud computing. From there, organizations plan to invest in customer experience, new product/service revenue opportunities, efficiencies, emerging technologies, employee experience and platform business development.
Cloud channel partners have the chops to help clients tackle — and succeed in — each of these areas.
More organizations are turning to cloud to transform themselves into cloud-first thinkers and users, according to Accenture. With that in mind, here are some closing thoughts from Accenture’s “Cloud Outcomes Research 2022”:
“A cloud-first organization is one that thinks not only about how cloud can fundamentally reinvent their business, but also how their business needs to be reinvented for cloud. In other words, organization must think about cloud … first. In doing so, they will see not only the opportunities available today, but those that cloud, and new technologies, [have] yet to uncover.”
Note, though, that Accenture contends that while cloud migrations are necessary, they represent an “insufficient step in cultivating value.”
More organizations are turning to cloud to transform themselves into cloud-first thinkers and users, according to Accenture. With that in mind, here are some closing thoughts from Accenture’s “Cloud Outcomes Research 2022”:
“A cloud-first organization is one that thinks not only about how cloud can fundamentally reinvent their business, but also how their business needs to be reinvented for cloud. In other words, organization must think about cloud … first. In doing so, they will see not only the opportunities available today, but those that cloud, and new technologies, [have] yet to uncover.”
Note, though, that Accenture contends that while cloud migrations are necessary, they represent an “insufficient step in cultivating value.”
Cloud computing represents a critical aspect of almost any organization’s priorities, yet its value can come off as “insufficient” if not done with long-term strategies in mind. That’s just one of the takeaways from Accenture’s new report, “The Race to Cloud: Reaching the Inflection Point to Long-Sought Value: Cloud Outcomes Research 2022. ”
In fact, this marks the first time since 2020 that Accenture has published its Cloud Outcomes Research.
Much has changed since then. And much of that change, of course, stemmed from the COVID-19 pandemic. Since 2020, organizations around the world have turned to cloud computing to help them stay afloat, or even thrive, in a time of uncertainty and fear. As a result, remote work likely will remain a go-to model for many entities, and so will ongoing cloud adoption.
One of the outcomes from the pandemic-led deployments is that more business leaders understand how cloud is fundamental to achieving strategic goals, Accenture notes in its Cloud Outcomes Research. To that point, over the past two years alone, more than 86% of companies have increased the scope and volume of their cloud initiatives, Accenture says.
Indirect Channel’s Role
Another outcome lies in ever-greater reliance on the indirect channel. One of Accenture’s Cloud Outcomes Research findings speaks directly to the benefit of teaming with cloud managed service providers. Read more about that in the slideshow above.
That data point leads to another observation. Accenture discovered that less than half of respondents (42%) say they’re getting full expected value from their cloud initiatives. Others feel stuck in a so-called “cloud transformation limbo.” And almost 70% of respondents say their cloud journeys remain incomplete. Now they’re looking for value from their investments. As a result, cloud channel partners are, and will continue to be, vital to helping clients get the most of out of those deployments.
How? Read on for more insights from Accenture’s latest Cloud Outcomes Research report. It contains responses from 800 business and IT leaders from around the world.
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