The bigger the cloud, the more likely it is to rain on you, the CIO of a UK insurer pointedly remarked. Many cloud transformations fail. She explained that unless you are born cloud native, it is challenging to drive cloud-enabled transformation. Thus, we need to cut through the market noise and be more honest that CIOs and operational leaders must manage a new operational complexity. Too many businesses start their cloud journey with an infrastructure and cost focus and become disillusioned when costs explode. Yet, those costs can be justified only if there are clear business objectives for transformation projects. How can we help organizations finally capture business value from their often-steep investments in cloud transformation?
There is a scarcity of compelling thought leadership on how to approach cloud-native transformation. To better understand how organizations capture business value from their cloud investments, HFS Research, in partnership with Wipro, interviewed 10 CIOs of Global 2000 enterprises in Q1 2023. We focused on understanding how the CIO role is changing through the adoption of cloud. HFS supplemented the CIO interviews with deep-dive interviews and discussions with the Wipro cloud leadership team, which shared experiences and offered best practices.
Most transformations failed Even before the onset of cloud, people and culture presented the biggest challenge and opportunity for IT leaders.
IT leaders own nearly two-thirds (63%) of cloud-native transformations CIOs own 23%. However, many CIOs have to reinvent themselves by double-clicking on the business value of IT, becoming an executive coach for the board, and fostering inclusive stakeholder management. While becoming cloud native mandates bringing IT and business together, the reinvention of CIOs is largely about execution.
Transformation must be anchored in business objectives Misaligned technology and business objectives is a key reason for the many cloud-enabled transformation failures. Cloud native is predominantly about people, culture, and change—not technology and capabilities. Cloud native is about a set of architectural and cultural principles. Ultimately, cloud-native transformation is about how we create and deliver, not where. Therefore, we need to drive the discussions back to data-driven outcomes and link those outcomes to business objectives.
Cloud is becoming a business discussion Becoming cloud native is about defining a North Star, blending business objectives with a realistic talent strategy. We must reset the cloud discussions more than ever and pivot from capabilities to business outcomes.
Don’t retrofit cloud into traditional operating models To achieve those outcomes, organizations must design their cloud target operating model.
The call to action is clear: Your cloud transformation will fail if it is not grounded in business objectives. To help enterprise leaders develop more nuanced narratives and foster an alignment of technology and business objectives, HFS has created the Cloud Native Foundation (see Exhibit below). It is built on the fundamental belief that becoming cloud native is about business transformation. You can only be successful on this journey if you align technology and business objectives.
The bottom line is equally clear: Cloud is becoming a business discussion. Thus, organizations need to define and align their business and technology objectives rather than stay lost in capability discussions. Yet, the biggest levers for progress on transformation are driving cultural change and enabling people.
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