CFOs and CIOs have a trillion reasons to team up to win the race to the cloud

What’s the potential business value of moving to the cloud? According to McKinsey, it’s a cool $1 trillion that’s up for grabs.

It’s such a huge number that it may seem like pie in the sky. But companies are already positioning themselves to grab a piece of that pie for themselves. The most recent example is FedEx, which made headlines earlier this month when it announced that it plans to move entirely to cloud-native structures within two years. The shipping giant estimates that it will save about $400 million annually. 

CFOs may be excited about the cost-benefit analysis, but IT teams have a lot to gain, too. From operational efficiencies to innovation, CFOs and CIOs should be building this plan together. 

Why early adopters win big — and how you can be one of them

Remember that whopping $1 trillion we mentioned above? It’s actually a conservative figure. McKinsey was unable to forecast the value generated by “pioneer” companies working in emerging technologies because the potential for future innovation is impossible to quantify. Rather, the $1 trillion encompasses the possible run rate for Fortune 500 companies in 2030, assuming they “aggressively pursue the cloud opportunity.” McKinsey also notes that early adopters will “capture a disproportionate share of the total value.” 

Also read: Ensure your move to the cloud leads to results that matter

The key to capturing that market share is ensuring that your cloud investments focus on the six “pools of value” below. 

1. Take the opportunity to reduce inefficiencies

Cloud migration shouldn’t be a matter of “lift and shift.” Rather, it should be an opportunity to reduce inefficiencies and manual processes that create lag time in legacy systems. Developing new systems or remediating existing ones not only increases productivity, it helps ensure that you’re not needlessly running up consumption costs. 

The McKinsey report includes compelling data showing that this investment is well worth it. The report states:

• Developers spend measurably less time on infrastructure and production support and more on business requirements and development when companies move to public cloud providers.
• Effective cloud usage can improve application development and maintenance productivity by 38% and infrastructure cost efficiency by 29% for migrated applications.
• Increasing the share of apps in the cloud from 10% to 60% would yield benefits of $56 million in application development and maintenance and $12 billion in infrastructure cost efficiency by 29% for migrated applications.

2. Prioritize security to reduce downtime

Do you know the cost of one minute of downtime? According to a report from the Information Technology Intelligence Consulting Corp. (ITIC), the cost could be $167 to $166,667 per server, depending on the size of your organization.

Prioritizing security operations in the cloud is an opportunity to harness automated, embedded security processes, such as DevSecOps, that allow you to identify and resolve breaches faster. McKinsey states that moving to the cloud could reduce the cost of security breaches by about 26% for migrated applications, resulting in about 57% less downtime. 

3. Optimize manual and digital processes

Digital transformation is on the lips of every organization these days. Business units that are able to take advantage of advanced analytics or efficient work-management systems are often able to free up staffers to work on higher-value tasks, rather than spending time on processes that can be automated.

With cloud migration, IT teams can help unlock or accelerate digitization throughout the business. This strategy can provide additional value if an organization makes the investment in training and reskilling workers so they’re able to take full advantage of the powerful technology available to them. 

4. Power experimentation that leads to growth

Embracing the cloud means teams can “fail faster” with less up-front investment. With the freedom to experiment against a backdrop of decreased risk, companies can expand into new areas or grow existing ones. The cloud can also provide visibility into market trends that allow organizations to plan more efficiently toward future states. 

5. Accelerate product development

Configuring solutions in the cloud is faster than on-prem. That kind of speed can unleash more innovation in less time with reduced research and development investments, allowing organizations to respond to market trends quickly and keep pace with the speed of business. 

The cloud also opens up a world of integrations with advanced tools and solutions that can dramatically reduce time to market. 

6. Scale faster

The cloud provides access to customer bases beyond your established regions and markets. With the added ability to instantly increase computing and storage power, the ability to expand your selling power is virtually limitless.

What’s the real business value of moving your organization to the cloud? Use our interactive calculator to find out.