Introduction
Cloud computing has transformed organizational operations, offering unmatched cost savings and operational flexibility. A recent Gartner survey identifies the top three drivers for cloud adoption as reducing time and cost on hardware maintenance, enhancing disaster recovery, and fostering a data-driven culture. However, many organizations struggle to fully capitalize on these benefits, sometimes leading to declouding. This article contends that the real value of cloud computing extends beyond these drivers, positioning the cloud as a key source of sustainable business advantage essential for thriving in today’s competitive landscape.
How Can the Cloud Provide Sustainable Business Advantage?
1. Potential for Increased Innovation
A recent study projects that global spending on public cloud services is set to reach $679 billion by 2024 and exceed $1 trillion by 2027. This growth is not just about cost savings; it represents a significant shift towards enabling innovation. To understand this projection, it is important to break down the various ways the cloud fosters innovation.
Firstly, the cloud allows for the consolidation of data from various sources within the organization. Once consolidated, organizations can derive strategic insights from this data to drive innovation. For example, Sunny Delight, the US-based beverage company, was able to increase annual profits by $2 million through cloud-based insights. Data consolidation also drives increased automation, reducing costs and increasing operational efficiency.
Another innovation driver is increased collaboration across an organization. This allows for the combination of diverse skills and experiences to nurture innovative ideas. According to a Harvard Business Review study, teams with diverse backgrounds and experience show greater creativity. Furthermore, when this collaboration is nurtured in a trust and respect-based environment by effective leadership, the result is a significant increase in innovation. A perfect example is the impact of the cloud on innovation during the COVID-19 pandemic. According to Statista, despite the pandemic, there was a sharp rise in demand for cloud-based innovation accelerators such as advanced analytics, by almost 50%.
Finally, while innovation can drive growth within an organization, innovation programs often require significant investments. The cloud allows organizations to redirect cost savings towards these innovation programs to drive growth.
2. Improving Green Credentials
According to the World Resources Institute, over 20% of the world’s largest corporations now have NetZero commitments. An effective step towards achieving these goals is the use of the cloud. One defining attribute of the cloud is the consumption-based model. By moving from legacy (on-premises) IT infrastructure to the cloud, organizations can reduce their carbon footprint by up to 84% when migrating to cloud services (Harvard Business Review).
3. Improved Organizational Agility and Business Resilience
Cloud-based solutions enhance business practices, particularly in remote working and disaster recovery. For instance, a CIO recounted how the COVID-19 pandemic forced his company to develop a work-from-home strategy rapidly. Their reliance on non-cloud-based applications hindered scalability, unlike competitors with advanced cloud strategies who adapted swiftly. Gartner predicts that by 2027, over 50% of organizations will use the cloud to boost agility and expedite business initiatives.
4. Increased Focus on Key Value Drivers
A well-implemented cloud strategy allows IT departments to focus on key strategic activities that promote organizational growth and exclude non-value-adding activities such as routine maintenance and continuous software support. According to a study by Gartner, organizations that adopt cloud services experience an average cost reduction of 30% in IT operations. Additionally, research by IDC found that companies using cloud services achieve an average 45% improvement in operational efficiency. This shift not only increases operational efficiency but also accelerates innovation, with 83% of IT leaders reporting that cloud technology has significantly improved their ability to innovate.
Conclusion
In summary, the cloud offers significant advantages in agility, innovation, and sustainability. To harness these benefits effectively, organizations must integrate the cloud into a well-thought-out innovation strategy. The cloud not only removes execution obstacles but also fosters a culture of creativity and problem-solving, leading to a sustainable competitive advantage. Infosys, with its extensive experience and expertise, is well-positioned to assist organizations on their cloud journey, ensuring they maximize the potential of this transformative technology.
Why Infosys?
At Infosys, we have successfully managed some of the largest cloud migrations. As a global leader in next-generation digital services, we have been recognized by Gartner as a leader in public cloud professional and managed services. We have over 10,000 cloud-certified professionals, in addition to specialist vertical teams who bring domain expertise to help in your cloud journey.
