What are the barriers to cloud adoption in health services: PwC

Most health services organizations are in the cloud or on their way, but far fewer are finding measurable results from their cloud investments. In fact, 81% of health services executives responding to PwC's 2023 Cloud Business Survey have adopted the cloud in most or all parts of their business, on par with the 78% of survey respondents across all industries. The numbers tell us that the majority of organizations have migrated to the cloud, yet nearly half of those have yet to realize all the value from the cloud.

The story is somewhat brighter in terms of improved capabilities, with more than half of health services executives saying the cloud has increased their capabilities in improved decision-making (65%) and enhanced customer experience (58%). But those numbers dip to a little more than half when it comes to how well the cloud has enabled cost-control, improved profitability, improved productivity, stakeholder trust and increased agility. Numbers dive to fewer than half in the areas of improved resilience, improved cyber posture, faster time to market and innovation in products and services. And only a little more than one-quarter say the cloud is helping to drive new revenue streams.

Numbers haven’t changed significantly since PwC’s cloud survey from 2021, when about 53% of companies across all industries said then that they’re not realizing substantial value from their investments. The inching needle isn’t moving fast enough.

While we can be encouraged that the trend is still positive on general adoption of cloud enabled services, we still have a long way to go as an industry.

Health services executives note measurable results from the cloud

Improved decision- making

%

Enhanced customer experience

%

Improved productivity

%

Improved profitability

%

Enhanced stakeholder trust

%

Increased agility

%

Improved resilience

%

Improved cyber posture

%

Faster time to market

%

Innovation in products and services

%

New revenue streams

%

Q: Which of the following best describes how cloud technology is, or is not, delivering measurable value in your organization? (Response to 'Already achieved measurable value')
Source: PwC 2023 Cloud Business Survey, January 2023: Healthcare base of 60

While we can be encouraged that the trend is still positive on general adoption of cloud enabled services, we still have a long way to go as an industry.

Chris Van Pelt, Principal, PwC US

Aspirations remain high

Health executives ranked the areas where they foresee the biggest value potential for leveraging cloud solutions over the next 12 months. Topping their list: cloud analytics for product and pipeline development, decentralized clinical trials and synthetic data sets, patient engagement and data interoperability and trusted research data exchange.

Health services executives rank top areas for value potential

Cloud analytics for product/pipeline development

%

Decentralized clinical trials and synthetic data sets for trial simulation

%

Patient engagement

%

Data interoperability and trusted research data exchange

%

Q: Which areas do you feel have the biggest value potential for leveraging cloud native solutions for the health industry over the next 12 months? (Ranked top 3)
Source: PwC 2023 Cloud Business Survey, January 2023: Healthcare base of 60

Is value the bridge too far?

Before they can realize value from their cloud investments, though, organizations have some hurdles to clear. Health services executives ranked their top three barriers to achieving measurable value from the cloud:

Inability to effectively measure/quantify return on investments
Budget and/or investment constraints
Lack of or inadequate cyber and privacy controls

Engaging someone early to both identify the high value returns, customized to your environment and variables, and supplying the rubric to quantity and measure results over time would go a long way in defining the business case and being able to demonstrate returns over time.

Barriers to achieving value from the cloud

%

Inability to effectively measure/quantify return on investments

%

Budget and/or investment constraints

%

Lack of or inadequate cyber and privacy controls

^{_{Q: Which of the following have been the biggest barriers to achieving measurable value from cloud technologies? Ranked top 3

Source: PwC 2023 Cloud Business Survey, January 2023: Healthcare base of 60}}

The secret to finding value from the cloud

The good news is that these barriers can be overcome. According to the survey, about 10% of those respondents across all industries are truly cloud-powered, and have moved to fully digital operations and are achieving measurable value across 12 cloud transformation metrics such as better decision-making, productivity or cybersecurity. This small but mighty group say they face no barriers to realizing value, and believe they are doing so at a rate twice that of other companies.

Cloud-powered companies have four traits in common, according to PwC research and experience:

A holistic and unwavering approach to cloud
C-suite collaboration from the get-go
Formal data, analytics and AI strategy
A focus on trust and controls

A holistic and unwavering approach to cloud

Cloud-powered companies don’t take a linear approach to cloud, going from workload migration to asset modernization to cloud native development. Instead, they take a combination approach, applying the method that makes the strongest business case for their goals. Once they decide, they’re committed. Cloud-powered companies are nearly four times as likely as other companies to sustain their strategic focus.

C-suite collaboration from the get-go

CIOs and tech teams at cloud-powered companies know that transformation is a group effort. They’re more likely to be in sync with key business functions at the earliest stages of planning, budgeting and requirements gathering. Additionally, cloud-powered companies prioritize their partnership with the CHRO and talent teams and make sure to engage throughout all stages of cloud projects.

Formal data, analytics and AI strategy

Executives at cloud-powered companies understand that data is at the heart of transformation efforts. And they need to address the all-too common issue of siloed — and mushrooming — data that is not only untapped but also ungoverned. Cloud-powered companies are much more likely to have an enterprise-wide data strategy than other companies (88% versus 59%).

A focus on trust and controls

Cloud-powered companies think about the specific, potential risks that cloud poses throughout all stages of transformation projects. Across all eight dimensions we evaluated, they are more advanced than other companies when it comes to adopting leading practices. For example, they are more likely to have dedicated resources devoted to cloud governance, formal and distinct cloud controls, and robust evaluations of shared responsibility with CSPs.

Simply adopting cloud is not enough for an organization. They need to be gaining capabilities from the cloud to be what PwC refers to as a ‘cloud-powered’ company. Only a sliver of health services organizations surveyed by PwC fit into the cloud-powered category. The so-called cloud-powered companies have experienced more benefits, including improved decision-making, productivity, cyber posture, and cost savings.

Cloud solutions

Cloud is one of the compelling forces helping payers and providers navigate an increasingly interconnected world. PwC can help health services organizations capitalize on cloud and drive meaningful change by modernizing core systems, scaling the value of their data and building intuitive solutions that power innovation and patient outcomes.

Read more about the strategic alliances that PwC has with AWS, Microsoft Cloud for Healthcare and Google Cloud and let PwC help you determine which is right for you.

Having a strategy and vision about what the cloud can do, and a defined plan about how to execute that - will in fact yield results.

For more information, read PwC's cloud survey.

About the survey

Between October 25, 2022, and November 18, 2022, PwC surveyed 1,010 US business executives. Respondents were from public and private companies in six major industries: financial services (24%); industrial products (20%); consumer markets (12%); health (12%); energy, utilities and resources (12%); and technology, media and telecommunications (20%).