The Transformative Effect of Cloud on Firm Productivity and Performance: Defining the benefits and impact of cloud as a 21st Century digital enabler

June 2019

The Transformative Effect of Cloud on Firm Productivity and Performance

Cloud can help deliver a 20% productivity enhancement in an integrated technology structure and when combined with best management practices. Cloud also facilitates accelerated time-to-market for products and releases, and is ushering a paradigm shift in how organisations implement technology: ‘heavy-lifting’ is increasingly being segmented to cloud providers, emancipating an enterprise to focus on developing differentiated offerings. As a result, technology is no longer a critical path item. Many digitally native start-ups are ‘all-in’ for cloud, enabled to enter the market due to the adoption of this technology.

One of the most frequently cited transformative attributes of cloud by firm managers is the adoption of a ‘leaner’ technical organisation, and the alignment of organisational structure and practices around this. The observed benefits include lower costs; an agile delivery model with aster releases, resulting in a higher return on equity (ROI). This research ‘peels the organisational layers’ through primary engagement in organisations with CxO level managers and other individuals across Operations, Technology, Resourcing, Finance, DevOps and other areas internationally, including drawing on over 20,000 interviews in 35 countries across firm size and industries since 2007, and enterprises encompassing around 1 million employees.

As cloud continues to evolve, so too will the organisations adopting it. Best-performing enterprises are increasingly positioning cloud at the core of their strategy. For many, ‘cloud is the strategy’. A best-practices cloud-centric approach includes alignment between functions and the creation of a centre-of-excellence. When these elements are brought together, they can result in competitive advantage to the enterprise. Many of the most successful firms ‘hard-wire’ a cloud ethos in their culture, supported by best management practices to create sustainable benefits that utilise the transformative and productivity-enabling benefits this technology.

This research indicates that cloud continues to reduce technology and organisational costs while boosting development productivity by a factor of five in many cases and enhancing ROI. The observed benefits are agnostic of firm-type, location, size or sector. The research continues to indicate that these results are possible when cloud and technology adoption is underpinned by ‘good management’.

Impact / Media Coverage - "Cloud Computing: a path to innovation, efficiency, and growth"
10 June 2019