More than three-quarters of CIOs and CFOs fear that their enterprises are missing out on revenue opportunities due to the absence of the right cloud infrastructure strategy and cloud applications to support digital business transformation, according to research.
As customers become more tech-savvy and “always online”, their shopping habits and expectations are changing. Digital experience delivery can make – or break – organisations, so a great digital experience is now a necessity. Businesses need agile and flexible infrastructure to make that digital transformation and meet users’ new expectations.
According to the Vanson Bourne study, commissioned by Canopy – the Atos cloud powered by EMC and VMware – CFOs estimated their businesses missed out on an average of €67m in revenues last year by not having the right cloud systems in place to support their digital transformation, the process of which involves improving services to serve a new class of ultra-connected customer.
The research surveyed 950 CIOs, CFOs and business decision-makers in mid-market and enterprise firms in the UK, US, Germany, France and the Netherlands. The C-level executives admitted that digital transformation is touching all aspects of organisations, from customer service, sales and business development through to innovation, product development and talent attraction.
Digital must be in the DNA of every department to help the business take market share and maximise revenue
Jacques Pommeraud, Canopy
But as many as 70% of CIOs and CFOs feared their businesses will become uncompetitive, with the majority (76%) estimating this will happen by 2015, because their underlying technology infrastructures are not capable of supporting the digital transformation.
The respondents added that with improved cloud capabilities their businesses could generate double-digit growth by 2015, with an average €123m revenue boost.
“As the survey highlights, digital must be in the DNA of every department to help the business take market share and maximise revenue,” said Jacques Pommeraud, chief executive of Canopy.
“From hospitality and retail, through to manufacturing, we see that those emerging as winners are taking advantage of digital capabilities and innovation to build entirely new revenue streams,” he said.
“We also observe that our most innovative customers have achieved a sharp gain in agility and the ability to refocus resources away from internal IT and towards growth. While “digital” is a widespread term today, right now digital transformation is only happening in pockets and is proving elusive for many global enterprises.”
Cloud paves the way for digital transformation
According to the cloud service provider, one of the keys to making the digital transformation is using cloud computing services.
“Cloud has the power to create revenue by making the customer journey effortless across any device, enable faster customer sign-ups so they’ll spend sooner, and support real-time analytics to make more accurate targeting decisions,” the research report said.
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“The most innovative clients use the power of cloud and large-scale analytics to generate new sources of revenue, for example in manufacturing for the area of preventative maintenance.”
Well-known enterprises and retailers such as John Lewis and Starbucks have acknowledged that using cloud services has helped them in making the digital transformation, managing innovation and beating disruptive technologies.
The study further revealed that almost two-thirds (64%) of respondents admitted that a lack of cloud investment was holding back vital digital initiatives, while an overwhelming majority (90%) recognised the need to embrace cloud-based applications and infrastructure to deliver digital transformation.
Despite the maturity of cloud technologies, the research showed many traditional barriers to adoption continue to haunt enterprises.
Around half of the CIOs surveyed agreed factors such as security (50%) and data protection concerns (44%) were hindering cloud investment, while a quarter stated protection of intellectual property (24%) and fears of supplier lock-in (23%) were additional barriers.
Lack of modern IT leads to missed opportunities
CIOs acknowledged the missed opportunities and threats involved if IT does not move to a more flexible and agile approach to support revenue growth and competitiveness.
Over a third of CIOs admitted that if their IT departments were not able to modernise IT effectively in the next 12 months it would lead to reduced staff productivity (38%), increased time to market (34%), reduced ability to service customers in new ways (33%), a risk of data theft occurring (35%) and limit their company’s ability to launch new products and services (35%).
Almost half of respondents who said their companies were missing out on revenue opportunities due to a lack of cloud investment said this was because their IT could not develop applications fast enough for the business (44%) and could not complete enough product releases each day or week to keep their software highly competitive (42%). A similar number (41%) said they could not get customers on board quickly enough due to slow response from internal legacy IT tools.
Cloud service providers must help enterprises overcome the barriers they face, especially given the critical role cloud technologies play in driving top-line revenue growth, innovation and talent attraction,” said Pommeraud.