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Most enterprises yet to reap business benefits of cloud transformation, HFS study says

Most enterprises yet to reap business benefits of cloud transformation, HFS study says

Recent research conducted by HFS in partnership with IBM Consulting reveals that although cloud transformation is a widely adopted investment in enterprise technology, most organizations have yet to experience concrete business benefits.

The research report highlights the challenges and strategies associated with cloud transformation. According to a survey of 510 senior executives, cloud transformation is considered one of the top three crucial investments for 60% of companies. However, only 25% of enterprises can demonstrate a measurable return on investment from their cloud initiatives.

HFS CEO and chief analyst Phil Fersht says cloud transformation is often limited to the technology realm. Still, it’s time to acknowledge its significance as an essential business investment.

“Cloud investments must transcend the traditional IT narrative and become a central discussion in the broader context of business transformation,” Fersht says.

Fersht notes the research highlights the importance of changing how we perceive the cloud.

“Cloud transformation that moves enterprises forward demands a seamless alignment between technology and business,” he adds.

The recent study also reveals that most cloud transformations are currently stalled in intermediate stages. This is primarily due to concerns related to cost, lock-in, and challenges in meeting budget and timeline constraints. Another significant obstacle is the need for more collaboration between business and IT. Moreover, only a few organizations clearly define customer journeys and value streams.

The report highlights the emergence of “business cloud masters”, a few enterprises that have adeptly leveraged cloud technology to fuel business expansion and foster innovation. It explores the distinctions between these masters and their peers, uncovering the fundamental strategies for effectively harnessing the potential of the cloud.

Varun Bijlani, the global managing partner of hybrid cloud services at IBM Consulting, notes: “These findings reinforce what we continue to see within enterprises―they are recognizing the need for adopting a hybrid cloud approach, but if not architected well, maximizing the return on investment is a challenge. To achieve tangible business outcomes through cloud initiatives, businesses need to make intentional choices regarding architecture, process and talent across the enterprise.”

Those who master this domain possess a visionary outlook, expert knowledge of architectural principles and a willingness to embrace cutting-edge technologies such as AI, the report notes.

HFS is a research and analysis firm that strives to empower clients with insights to navigate challenges effectively. Its team of analysts and strategists offers expertise and experience in research and data analysis to provide leaders with industry information.

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