Expectations versus reality – why some Cloud projects don’t realise their full potential
Why do some Cloud projects fail to achieve their expected outcomes? Accenture's latest research looks at the barriers to success in cloud migration projects and what Kiwi companies can do to overcome them.
Any company leadership team worth its salt already has a digital transformation project underway that includes moving applications and data to the cloud.
But that doesn’t mean that moving to the cloud always achieves the desired outcomes. In fact, the latest Cloud Outcomes Research blind survey by consulting firm Accenture has found that only 37% of executives at the 750 large companies surveyed felt they had fully achieved the anticipated outcomes of cloud projects.
Those outcomes included factors such as cost, speed to market, business enablement, service levels and business resilience and continuity.
There’s barely been any improvement since the 2018 survey, when just 35% indicated full achievement. While companies that were high adopters of clouds technology were more likely to succeed with such projects, 52% of them still admitted they’d failed to achieve the expected value from their cloud initiatives.
Less than half of those surveyed (45%) were “very satisfied” with cloud outcomes and only 29% were confident that moving to the cloud would deliver the expected value in the expected timeframe.
Lagging the Americans
There’s clearly a gap between expectations and reality when it comes to the outcomes of cloud migration projects. There are regional variations too. In the Asia Pacific region, we trail North America and Latin America when it comes to cloud adoption and achieving outcomes from cloud projects.
The main barriers to success, according to Accenture’s survey results, are likely to evoke a weary nod from any IT manager or C-suite executive who has managed a cloud migration – security and compliance risk, legacy infrastructure and application sprawl and misalignment between IT and the business.
The companies surveyed between July and August of 2020 as the pandemic triggered a flurry of cloud initiatives, all had annual revenue of US$1 billion or more. Those with revenue over US$10 billion seemed to have better outcomes with their cloud projects overall. We only have 30 – 40 companies breaking the one billion dollar mark in annual turnover, but the same problems are likely to affect our mid-sized companies too.
Umbrellar Connect spoke to Paul Hearnden, Accenture New Zealand Technology Lead, about the Cloud Outcomes survey results and how Kiwi organisations can close the gap to fulfil their cloud ambitions.
We seem to be lagging in this part of the world (APAC), when it comes to achieving desired results from the cloud. Why do you think this is and do you have any reflections specifically on New Zealand in this respect?
“There is a level of hesitation among New Zealand organisations to give up their legacy systems and mindset and take full advantage of cloud technology. Unlike periodic upgrades to legacy systems, when a business migrates to the cloud they need to think and operate differently.
“This change in mindset can be one of the big barriers for Kiwi businesses, as they fear the disruption it could cause and are often not fully aware of cloud’s benefits. Those businesses that have successfully adopted the cloud have usually run their migrations in parallel with a programme of change management.
“The change in mindset and operations that comes from migrating to the cloud will be disruptive. But when the changes are well-managed, and staff are kept well-informed and provided training for the new ways of working, businesses will soon realise the benefits from migrating their operations to the cloud.”
It appears from the research that trying to migrate to the cloud yourself is a bad option – it is better to partner with a third party as a managed service. Why are more organisations not taking this path? Is there a perception that it is more costly in the long run?
“While some organisations try to migrate to the cloud themselves, our research indicates that organisations that have partnered with a third party have better outcomes.
“This option is often pursued due to perceived cost savings. But if organisations lack the required cloud skills internally, these projects can often create a false economy. It is easier in the long run to partner with third parties who understand not just the technology, but also how organisations and individuals operate within those technology environments.
“Cloud use and adoption is more often an issue of skills and culture than an issue with the technology itself. Partnering with external expertise provides companies with a fresh perspective on how your organisation actually operates, rather than how staff or management think it operates. From there, strategies can be developed to onboard staff into new ways of working.”
What does the research suggest about the vendor community and cloud providers who are facilitating this moving to the cloud? Full achievement of outcomes isn’t very high – are they overselling and under-delivering the potential of the cloud?
“It is easy for vendors to oversell the technology as a solution before they properly understand the organisation’s complexities. Cloud projects can face delays if customers do not disclose issues with vendors during the planning phase.
“For example, there may be sensitive data security requirements that means certain parts of an organisation’s systems need to be migrated to a separate cloud environment. Understanding these complexities will add to a project’s scope and are important for vendors to understand before work commences.”
Why is it harder for smaller businesses to achieve their expected outcomes from moving to the cloud? Is there a gap in the market here where smaller organisations struggle to move to the cloud but can’t get the right support?
Our report identifies that a lack of skills is the main concern for small businesses looking to realise benefits from the cloud. Unlike their larger counterparts, small businesses may not have the scale to support an in-house IT team that can provide the required expertise to fully harness cloud technology.
We recommend small businesses seek out the expertise they need to migrate to the cloud. Small businesses are often less complex and starting their cloud journey earlier will be easier compared to when they are larger.
What would your advice be to any leadership team that has moved their organisation to the cloud to some degree but is struggling to achieve their desired results?
“There is often a misconception among business leaders that migrating their operations to the cloud is a technology solution that can be confined to their IT team and vendors. This is a misguided approach.
“To successfully realise the benefits of cloud, business leaders must see cloud migration as being more than a technology project. Migrating systems to the cloud will shift how the enterprise operates and this will require changes in the way that team members work.
“Leaders should make sure that team managers are well-briefed about the changes and what they will mean for their direct reports.
“Every organisation will contain staff members of different technological proficiency. There will be early adopters that will require little training, a large cohort of people in the middle that will require training, and some people that will need more tailored and individualised support to successfully adapt to the new way of working.
“The successful deployment of a cloud solution is equal parts technology and behaviour change. Getting buy-in from staff will be crucial if businesses are to fully realise the benefits of a cloud migration.”
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