NODE - How cloud migration drives ROI

More than half of enterprise IT spending in key market segments will shift to the public cloud by 2025.

That’s huge news, bringing with it opportunity and challenge in equal measure:

The opportunity: maximising value and driving innovation
The challenge: seizing this opportunity while keeping costs under control

SoftwareOne wanted to find out exactly how the most successful enterprises are maximising the impact of cloud transformation to drive ROI.

Our research of 300 top IT executives showed that when businesses get more proficient with cloud technologies, they do more than just lower expenses. They observe a notable increase in revenue as well. It goes beyond simply implementing new technology. It involves radically changing the way their firm is run.

All of which could give you actionable insights to enhance your own cloud ROI—regardless of your current adoption stage.

Rising benefits. Falling costs.

According to the research, organisations just starting their cloud migration—cloud beginners—invest 1.3% of their revenue on the cloud, while those well-advanced—cloud leaders—invest just 1.1% of revenue.

While beginners report a 19% decrease in overall business costs, those savings grow to 25% as they become cloud leaders.

Revenue follows a similar pattern. It increases for 25% of cloud novices, and for 48% of these businesses as they advance to become cloud leaders. Using the cloud can also help organisations grow more quickly and easily, be more resilient and agile, compete more successfully in the market, and retain customers.

In two years, as companies advance in cloud usage, the percentage of mid-sized enterprises experiencing these benefits is expected to climb: 56% expect to increase revenue; 53%, to reduce costs; 49%, to scale their business; 47%, to improve resilience and agility; and 46%, to improve competitiveness.

Mid-size businesses are speeding up their cloud transformation despite a sluggish start to make sure they don’t fall behind. 37% of apps at the majority of the studied organisations are currently running in the cloud, despite the fact that most began their cloud migration within the last two to four years. Within two years, these organisations hope to raise that figure to 48%. During the next two years, they want to move five major business activities, up from the current four.

Six best practices to optimise cloud usage

Moving to the cloud may be complicated, of course. Executives frequently have to navigate a labyrinth of technological and business obstacles. Making sure data is secure and private, choosing the best tools and providers, and keeping services operational during a cloud migration are the most frequent obstacles. Managing technological debt, monitoring and regulating expenses, and not having a strong organisational base are some other problems.

To overcome these impediments and optimise cloud results, mid-market companies should consider six best practices uncovered by the SoftwareOne research:

Actively manage cloud costs using best practices and tools such as cloud financial management (FinOps) to create a culture of accountability.
Focus on business goals rather than the technology side of cloud transformation to ensure that decisions are made for the right reasons and produce the desired results.
Take a structured approach to decisions about shifting and modernising applications that focus on business imperatives and set the correct priorities.
Develop the culture and talent to succeed in the cloud by creating a cloud centre of excellence to provide training and advice. This ensures proper cloud governance and standard processes and foster wide adoption of cloud best practices.
Select the right tools and partners, using various cloud service models and turning to a range of cloud technology partners to bridge the skills gap as needed.
Put cybersecurity at the centre of cloud migration plans, assess and improve application cybersecurity before migration, and ensure that the technology team has cloud security expertise.

Ready for cloud-driven ROI?

If you have one key takeaway, it should be that cloud migration isn’t just about technology. It involves radically transforming your company for the digital era. Our research shows that cloud leaders really can realise dramatic improvements in both cost savings and revenue growth. However, attaining these kinds of outcomes calls for more than just migration—it also calls for a calculated approach to cloud adoption and a shift in mentality.