July 27, 2022 By Paul Callahan
Brent Smolinski
3 min read

Cloud computing is often described as a savior for businesses. Early success stories have shown that cloud can be used not only for improving business operations but also as an invaluable tool for driving business growth. Innovative, cloud-based platforms such as customer relationship management (CRM), e-commerce and analytics are making it easier than ever for businesses to experiment and pilot cutting-edge capabilities to increase revenue and gain market share.

These success stories have opened the eyes of CEOs and senior business executives to the value of cloud computing. Our research shows that 86% of CEOs believe that cloud is essential to deliver the results they need over the next 2-3 years.

Yet many organizations are struggling to make the business case for their cloud investments, and upwards of 30% of cloud initiatives fail. The cloud is a new way of doing things, and for most companies, it requires a different set of skills, processes and tools. Many companies apply traditional practices and existing capabilities to the cloud and fail.

In our experience, there are four primary issues that hold businesses back from realizing value:

1. Business and IT misalignment

An overwhelming majority of cloud programs tend to be driven by IT organizations. However, the bulk of cloud value is typically unlocked within business operations. To realize that value, businesses must change the ways they work. But CIOs are rarely positioned to drive these changes themselves. Business executives, on the other hand, are reluctant to take responsibility for these cloud programs because they are uncomfortable working with the cloud (and often with technology in general).

2. Underestimation of technology complexity

CIOs consistently underestimate the technology complexity associated with successful execution of cloud modernization. Cloud undoubtedly appeals to CIOs that wish to “get out of the data center business” and focus on more value-adding capabilities. There is also the undeniable beauty and promise of a highly distributed, event-driven microservices architecture on cloud that can power the next generation of intelligent applications. However, despite the many virtues of cloud, businesses are discovering that they are unable to shed the full responsibility of platform and infrastructure management. Quite the opposite, many companies find that managing hybrid environments adds a significant layer of complexity to platform and infrastructure operations.

3. Over-indexing on organization

Although CIOs appreciate the need to change their operating model to be able to work in this new cloud environment, they often treat these changes as a “boxes and arrows” exercise. In other words, they shuffle and regroup resources rather than breaking down barriers, addressing inefficiencies, and fundamentally changing the way their teams work. The only way technology teams have a hope of keeping up with expectations is if they drive very high levels of automation. Unfortunately, many companies fail to explicitly invest in the automation and AI necessary to transform IT delivery to take advantage of these new technologies.

4. Poor financial discipline

Many IT organizations lack the financial management capabilities to measure and manage cloud value. Our research shows that less than 40% of cloud programs have a well-articulated business and financial case. Some technology leaders are less well versed in IT economics and lack an understanding of how operating decisions can lead to financial outcomes. Further, in many companies, there can be a lack of adequate visibility into assets and metrics. The lack of an analytically-driven culture makes it difficult to derive a clear view of the value and efficiency of their cloud initiatives.

Being aware of these four failure patterns is the first step to being a proactive leader who can lead successful modernization programs and deliver business results.

Make sure your cloud modernization project succeeds. Find your digital transformation strategy.

Was this article helpful?
YesNo

More from Cloud

Announcing Dizzion Desktop as a Service for IBM Virtual Private Cloud (VPC)

2 min read - For more than four years, Dizzion and IBM Cloud® have strategically partnered to deliver incredible digital workspace experiences to our clients. We are excited to announce that Dizzion has expanded their Desktop as a Service (DaaS) offering to now support IBM Cloud Virtual Private Cloud (VPC). Powered by Frame, Dizzion’s cloud-native DaaS platform, clients can now deploy their Windows and Linux® virtual desktops and applications on IBM Cloud VPC and enjoy fast, dynamic, infrastructure provisioning and a true consumption-based model.…

Microcontrollers vs. microprocessors: What’s the difference?

6 min read - Microcontroller units (MCUs) and microprocessor units (MPUs) are two kinds of integrated circuits that, while similar in certain ways, are very different in many others. Replacing antiquated multi-component central processing units (CPUs) with separate logic units, these single-chip processors are both extremely valuable in the continued development of computing technology. However, microcontrollers and microprocessors differ significantly in component structure, chip architecture, performance capabilities and application. The key difference between these two units is that microcontrollers combine all the necessary elements…

Seven top central processing unit (CPU) use cases

7 min read - The central processing unit (CPU) is the computer’s brain, assigning and processing tasks and managing essential operational functions. Computers have been so seamlessly integrated with modern life that sometimes we’re not even aware of how many CPUs are in use around the world. It’s a staggering amount—so many CPUs that a conclusive figure can only be approximated. How many CPUs are now in use? It’s been estimated that there may be as many as 200 billion CPU cores (or more)…

IBM Newsletters

Get our newsletters and topic updates that deliver the latest thought leadership and insights on emerging trends.
Subscribe now More newsletters