What It Will Take to Sell Cloud to a Skeptical Business

The other week, I covered a report that asserts Fortune 500 CIOs are seeing mainly positive results from their cloud computing efforts. The CIOs seem happy, but that doesn’t mean others in the organization share that enthusiasm.
Andi Mann: 'We didn't find a horde of  happy campers.'
Andi Mann, vice president for strategic solutions at CA Technologies, for one, questions whether CIOs are the right individuals to talk to about the success of cloud computing. And he takes the original Navint Partners report – which was based on qualitative interviews with 20 CIOs – to task.
“Twenty CIOs are happy, so far, with cloud computing. But what about their bosses, their employees, their organization’s partners and their customers?” he asks. “Are they happy?”
In order to understand the business success of cloud computing or any innovative technology, Mann points out, “we need to (a) talk to more than just CIOs, (b) be certain we’re asking all the right questions, and (c) hit a larger sample than just four percent of the Fortune 500.”
CA Technologies did just that, commissioning IDG Research Services to conduct a global study on the state of business innovation. “To be ‘innovative’ means your organization is capitalizing on cutting edge advancements such as cloud computing, big data, enterprise mobility, devops, the IT supply chain, and so on,” he says.
And Mann delivers this thought-provoking news: “After talking to 800 IT and business executives at organizations with more than $250 million in revenue, we didn’t find a horde of happy campers. Yes, some CIOs are happy with the cloud, and that’s a good thing. But here’s the rub. Firstly, CIOs are not the principal drivers of innovation. Users are. Second, our research found business leaders are, in many cases, unhappy with what their CIOs are doing.”
Business executives are not as excited as IT is about cloud computing, either, Mann continues. “Forty percent of IT respondents say their organization plans to invest in cloud computing over the next 12 months, versus 31% of business executives. Also, business executives give IT low marks in enabling and supporting innovation. One in two rate IT poorly in terms of having made sufficient investment in resources and spending on innovation; 48% think IT isn’t moving fast enough; 37% think IT doesn’t have the right skills; and 40% say IT isn’t receptive to new ideas when approached by the business.”
While cloud offers IT leaders the ability to keep the lights on for less, that’s only one dimension to consider, Mann says. “The crucial question to answer is if the IT organization is innovating with the cloud. Savings are one thing. Moving the organization ahead and keeping it technologically competitive is another. “
Mann provides examples of questions the business needs to be asking before a cloud approach is contemplated: “The business wants IT to explore the world of digital technologies and deliver answers. How can you align mobile and consumerization with the business interest? How do you connect with millions of people over social media? How do you find a new market and get into that market in a different geography or a different product area? How do you use technology to smooth out the bumps in an M&A activity?”
CIOs need to help the business understand that the cloud has many other business advantages beyond cost efficiencies, says Mann. “But the only way to capitalize on those advantages is for the executive leadership to allocate budget appropriately. We need to soften the focus on cost cutting, and sharpen the focus on IT empowerment and business alignment.”
To get there, he says, “CIOs need to make a case for greater investment in cloud computing, not simply to cut costs longer term, but to drive innovation and competitive advantage. Can the CIO win additional budget if she could achieve success according to real business KPIs such as return on equity, return on assets, shareholder value, revenue growth, or competitive position? If the CIO could reliably and measurably move the needle on such things, instead of just auditing costs, the ‘happiness gap’ between the business and IT could be closed.”
It’s time to increase our understanding of the broader and deeper impact of cloud on organizations. “We’ve been talking about IT-to-business alignment for generations. Yet we keep surveying the IT guys when we should be surveying the organizations they serve,” says Mann. “I’m concerned that, statistically, a significant percentage of Fortune 500 business executives might not be happy with the cloud. And that, by far, is the more important number for CIOs to measure and improve.”