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Cloud PwC US Cloud Business Survey

Cloud payback: Everyone wants it.
Four ways to get it

74%

of business leaders are engaged in cloud strategy

56%

of executives see cloud as a strategic platform for growth and innovation

53%

of companies have yet to realize substantial value from their cloud investments

The good news

Business leaders across the C-suite see cloud’s critical role in both defining and achieving their company’s growth and operational ambitions. And they have high expectations.  

Now, the bad news: Few companies are positioned for cloud to fully deliver on its exceptional promise. This gap between possibility and reality is clearly reflected in PwC’s inaugural US Cloud Business Survey. Given cloud’s transformational potential for organizations, the survey explores what cloud means for business and technology executives in seven distinct leadership roles, including the chief information officer (CIO), chief operating officer (COO) and board member. 

This cross-functional view is essential to capitalizing on cloud, and the survey findings can help companies identify critical areas to address so they can more fully capture value. And it’s not too late. We’re still in the early stages of a cloud sea change, a change in which thinking, doing and innovating are accelerated across the business. After all, “the cloud” is not a singular destination — it’s a dynamic fabric that drives resiliency, agility and lasting transformation. 

Business leaders agree that cloud is now both an integral part of corporate strategy and day-to-day operations. Regardless of where they sit in the organization, cloud has become a unifying force for CEOs, strategy heads, and business unit and functional leaders. In fact, when looking across 11 dimensions related to cloud strategy and implementation, functional leaders emerge as active decision-makers. As with any business transformation decision, leaders from across the business play a critical role in cloud. For example, there’s a high degree of shared ownership across the C-suite for cloud investment decisions (74% of executives are involved). And looking at individual roles, it ranges from a high of 88% for CIOs to an engaged 62% for tax leaders. Our survey also indicates that the COO is emerging as a key business transformation and cloud leader across all areas.

Bar chart titled
Who’s leading cloud? The entire C-suite
Company-wide strategy and defining the business outcomes and value we expect
Investment decisions, budgeting and value realization
Developing products, services and other customer-facing capabilities
CIO
%
%
%
CFO
%
%
%
Tax leader
%
%
%
COO
%
%
%
CRO
%
%
%
CHRO
%
%
%
Board member
%
%
%
Q: Which of the following aspects of your company’s cloud transformation are you responsible for or involved in? Decision-making responsibility or ownership – in conjunction with others/independently. Source: PwC US Cloud Business Survey. June 15, 2021: CIO base of 109, CFO base of 84, Tax leader base of 53, COO base of 67, CRO base of 70, CHRO base of 84 and Board member base of 57

Understand the cloud value gap — and four paths to close it

Cloud in its many forms is a critical enabler for broader business transformation. It helps connect systems, data, devices and emerging technology in ways that can help companies respond more quickly, agilely and innovatively. The majority of executives in our survey, 92%, say their companies are “all-in” on cloud or have adopted it in many parts of the business. 

As such, cloud has become a rallying point for the C-suite. While that’s a positive development — and a necessary one if companies are not only to deliver on strategy but accelerate it — executives aren’t getting the value they’ve been hoping for.

What business outcomes are executives after through cloud? Topping the short list are improved resiliency and agility (34% say their companies pursue this goal), better decision-making (34%), and product and service innovation (33%). However, when asked whether they had realized substantial value in 12 target areas, only about half of companies had on average.

Bar chart titled
Cloud value: Is your company getting the payback you expect?
Target business outcome
Realized substantial value
Improve resilience and agility
%
%
Improve decision-making through better data analytics
%
%
Innovate our products and services
%
%
Create better customer experiences
%
%
Increase profits
%
%
Improve talent retention and recruitment
%
%
Improve employee experience
%
%
Reduce costs
%
%
Enhance brand and reputation
%
%
Ensure business continuity
%
%
Combat new industry entrants
%
%
Disrupt our own industry or other industries
%
%

Average value realization gap of

53%

between companies seeking specific business outcomes and those realizing substantial value from their investments

Q. To date, which of the following business outcomes have you been trying to achieve through your cloud transformation? Q. To what extent have you realized substantial value in those areas to date? Source: PwC US Cloud Business Survey. June 15, 2021: base of 524

This unrealized value is significant, but it only begins to speak to cloud’s untapped potential to propel strategy. Those companies that use cloud as a springboard to truly change how they think, operate and do business can see even greater payoffs.  

Most executives will wonder where their own company falls on the value spectrum. But given what’s at stake, equally important questions are: Why do investments fail to deliver? What can we do about it?

 

Four actions to help close the cloud value gap

1. Align on strategy choices and value

Our survey reveals disconnects in the C-suite when it comes to defining and quantifying cloud value. Among executives, there’s no dominant definition of value. About a quarter equate it with faster innovation, while slightly fewer measure it in improved resilience or increased revenue. By role, CIOs and board members are most focused on innovation (39% and 23%, respectively), and CFOs and COOs prize improved resilience (25% each). While cloud can and should deliver value across many dimensions, differing views on value can be symptomatic of the fact that many companies haven’t made clear strategic choices in cloud investments. 

Additionally, almost half of business leaders (49%) see the inability to measure value as a key barrier to achieving value, and almost as many CFOs (48%) say they lack confidence in their ability to measure the return on cloud investments.

Likewise, executives within a single company may see the organization's cloud evolution quite differently. Half of survey respondents characterize their companies as highly mature, with cloud scaled throughout the business, perhaps because cloud has been in use as on-demand software and data storage for years. But that assessment changes when you poll different executives. Sixty-six percent of tax leaders say their companies are mature, while 43% of risk management leaders and 50% of CFOs agree. These executives are likely considering maturity very differently, and some may not be fully aware of cloud’s potential to drive transformation and change every facet of the organization.

Now is the time for executives to coalesce around a broader definition of cloud and the value it can bring to drive business transformation.

Bar chart titled
How companies are measuring cloud value
Faster innovation and delivery of new digital products and services
%
Improved operational resilience, safety and soundness
%
Increased revenue
%
Ability to execute on our strategy to fundamentally change the business
%
Cost savings and efficiencies
%
We are not specifically measuring value because cloud is seen as a necessary business foundation
%
Unsure
%
Q: How is your organization primarily measuring value realized from cloud? Totals may not add up to 100% due to rounding. Source: PwC US Cloud Business Survey. June 15, 2021: base of 524

What companies can do

Develop the value story. Many executives recognize that cloud is not just an infrastructure or technology play, but their company’s cloud strategy is not part of its business strategy. This requires making specific choices about how cloud will help you differentiate your business — what digital and technology capabilities you’ll develop, the customer problems you will solve, and the role your company plays in industry or other ecosystems. In short, how can you embed cloud capabilities to enable end-to-end digital transformation? The CFO can play a leadership role here along with the CEO, scripting and sharing the company’s cloud value story, working with other business leaders to zero in on where cloud can best drive strategy and jointly developing an investment thesis.

A cloud transformation mentality isn’t about technology — it’s characterized by customer centricity, agility and reimagining everything.

Embrace new mental models. Crucial to realizing cloud value is a fundamental shift in both how the organization works and how quickly it can deliver new products, services and experiences. It’s a product versus project mindset that focuses on sprints and outcomes. As with earlier tech transformations, applying cloud to existing processes and structures will yield only limited gains. Business leaders should commit to rethinking how work is done. That applies to market-facing innovation as well as internal processes. For example, have you modernized your finance approach to technology so that you’re anticipating and optimizing spend or are you merely replicating the approach used with on-premises systems?

Team strategically. Tax leaders in particular can be key players in the cloud conversation, working in step with the CIO, CFO and other executives. Take, for example, their insight around using cloud-related R&D tax credits to offset the cost of innovation funding. We’ve seen companies achieve a significant cost reduction (typically ranging from 8% to 20%) when this is properly planned and accounted for — yet only 38% of CFOs say they’re very confident their company is taking advantage of R&D tax credits for cloud investments.

2. Get in front of the next digital talent divide

Businesses today already face severe talent challenges that are a byproduct of digital transformation. The shift to cloud has only intensified things. And it will take the full power of the C-suite to address these people impacts — impacts that could have long-lasting consequences. We could face a future of corporate haves and have-nots when it comes to the talent needed to compete. 

The digital talent divide affects not just tech specialists, but employees and business leaders who have the skills and mindset to thrive in a cloud-empowered world.

The divide is likely to be more pronounced this time because of cloud’s intrinsic ability to accelerate innovation and growth. Digital native companies, including tech startups and many established powerhouses, already operate this way and are proof of cloud’s competitive advantage. Likewise, companies that fully transform through cloud, especially those evolving their people strategies, are likely to propel ahead of others that don’t take a holistic approach.

Many business leaders are beginning to raise concerns here. In our survey, 52% of executives cite lack of tech talent — such as skills in cloud architecture, cybersecurity or DevOps — as a barrier to realizing cloud value. For COOs and CIOs, that number is even higher. Likewise, 47% of business leaders worry about their ability to upskill people in line with the new ways of working that cloud demands. Here again, COOs and CIOs are even more concerned, along with tax leaders and CHROs.

Talent concerns among key barriers to realizing cloud value
Bar chart - Talent concerns among key barriers to realizing cloud value

Q: To what extent have the following presented barriers to achieving that value? Source: PwC US Cloud Business Survey. June 15, 2021: base of 524

What companies can do

Start or expand digital upskilling for all employees. Continuous learning, sometimes called a flywheel approach, is needed so that the organization can continually refine its capabilities and its business model. This starts with digital upskilling for all employees, which many companies have put in place — or are just now adopting. Your program should address both tech skills and new ways of working and include creating learning pathways. It should also free up time for people to engage in upskilling and provide opportunities for them to try out new cloud-related skills. Since changes to a company’s systems and processes have a ripple effect on every business area and role, take a comprehensive look across the organization. Are you upskilling internal auditors, for example, so that they are equipped to evaluate new internal controls or remediate new risks?

Develop programs to cultivate cloud skills. For tech talent, upskilling is especially critical. For example, you can start with cloud training that’s designed to work with a cloud vendor’s certification program. Or consider other ways to develop a learning culture, such as mentorship opportunities where junior talent with strong foundational cloud skills are paired with more experienced IT employees who lack them. At the same time, continue to recruit experienced tech talent, including those well versed in artificial intelligence (AI) and other emerging tech. You might also consider how third-party partners with deep technical experience can help with learning and development. Those service providers might also be part of your upskilling plan — building apprenticeship-type models into engagements, for instance, allowing in-house resources to learn by doing alongside specialists. 

Upskill the C-suite. Developing better cloud business understanding among your executive team and board members is also important. This includes a shared understanding of the company’s business goals, how cloud enables them through a new mindset and how value will be measured. This is an area where CIOs often take the lead, working to build the knowledge and confidence of other business leaders. While education sessions at board meetings and other forums are often part of such an approach, it can be especially effective for CIOs to work one-on-one with a handful of peers to help them better connect cloud to business strategy. An executive-level upskilling program might also include sessions with external partners and cloud service providers.

3. Start early to address risk and build trust

Our survey results are encouraging in that executives view cloud through the lens of “what it can do” for an organization, as opposed to simply the threats that it may introduce. Notwithstanding, 17% of respondents do define cloud as a security and business risk that needs to be addressed, and 50% see this risk as a significant barrier to realizing cloud value. And that has been a compelling discussion point at the board level for the last several years. 

Said another way, moving data outside the organization’s four walls and relying on third-party cloud services could increase vulnerabilities and erode trust with customers, employees and other stakeholders. The flip side, though, is that cloud-based cybersecurity can strengthen a company’s defenses and help accelerate cloud transformations. For these reasons, it’s an incredible growth area and the one that tops the list of the kinds of future cloud capabilities CIOs, CISOs and tech leaders are pursuing for their organizations.

As we see in our work with clients, companies are not always attuned to the full picture related to risk and cybersecurity and may be too slow in implementation to reap the full benefits and avoid extra costs. This was borne out in our survey as well. A scant 17% of CROs and chief audit executives tell us that they’re brought in to cloud projects at the planning stage, with many coming to the table much later during requirements gathering. Risk-related issues need to be considered early as companies look to optimize their cloud efforts and lay the foundation to scale.

Bar chart titled
Too little, too late: cybersecurity and compliance are often afterthoughts
During the planning phase
%
During technical requirements gathering
%
During business requirements gathering
%
During migration
%
Post-migration
%
Unsure
%
Q: At which stage of the project does your company start considering security and compliance? Source: PwC US Cloud Business Survey. June 15, 2021: CRO base of 70

What companies can do

Revisit customer commitments. Consider how moving to cloud affects your compliance obligations and customer commitments. If you’re a financial services provider that’s now processing transactions via cloud, for example, have you introduced any new risks or are you in breach of any contractual obligations? If your company currently issues SOC-1 (internal controls) or SOC-2 (security requirements) reports, reevaluate the scope and approach to demonstrate to customers that the trust they enjoyed in an on-premises world can be sustained. In addition, does your internal controls team fully understand the shared responsibilities that are part of your cloud service provider’s agreement and how to assess compliance there? Does your team consider trust an ongoing effort because cloud service providers are continually updating their offerings and adding new functionality such as AI and other emerging technology? 

Considering trust angles at the earliest stages of a cloud initiative can also be an opportunity to enhance trust with customers or differentiate products and services.

Build trust in cloud-powered services. We’ve seen some companies issue trust-based attestation reports that can provide comfort to customers that a new product or service has been thoroughly reviewed and certified by a third party. This is an approach the 32% of executives who say their companies plan to innovate their products and services through cloud over the next three years should consider.

4. Advance your ESG goals with cloud

Cloud can be instrumental in accelerating your efforts around environmental, social and governance (ESG) issues, issues that we expect will be pivotal for businesses going forward. In our Consumer Intelligence Series survey on ESG, 75% of respondents indicate they’re more likely to purchase from or work for companies that share their values. And 76% tell us they’d discontinue relations with companies that treat employees, communities and the environment poorly.

As business leaders take a stronger role in addressing issues like climate change and decarbonization and improving diversity and inclusion, some are considering technology’s role, particularly as it relates to transparency and disclosures. About a third of business leaders in our survey say they have an understanding of how cloud impacts the E, S and G. A similar number are beginning to use cloud to inform their ESG strategies and reporting. COOs, understandably, are particularly focused here, with 70% actively looking at or implementing how cloud can support their ESG strategy.

Business leaders look to cloud to accelerate ESG progress
Bar chart - business leaders who are considering, developing, have or have implemented a plan to accelerate ESG progress

Q: For each of the following areas, to what extent is your company considering the intersection of your cloud transformation and the environmental, social and governance (ESG) goals of your company? Source: PwC US Cloud Business Survey. June 15, 2021: base of 524

What companies can do

Standardize and automate ESG reporting. One of the most obvious ways cloud can support ESG is through cloud-based data management and reporting. This can help automate the process and standardize the data, as well as provide greater transparency within the organization. Much of the data underpinning a company’s ESG reporting often lives throughout the organization — the chief sustainability officer, for example, might own the data about carbon emissions. Yet the CFO is beginning to take a lead role here in establishing credible metrics and reporting in a more consistent manner.

A lesser-known way that cloud can support ESG efforts has to do with the quest to achieve net zero greenhouse gas emissions by 2050.

Look at how your CSP advances your green goals. While most companies recognize that moving their data to a third-party cloud service provider (CSP) can help them reduce their carbon footprint (as emissions from a data facility are typically considered scope 1 or scope 2 level emissions), some are also looking at how to incorporate their CSP’s emissions in their carbon reduction strategy. With net zero commitments specifically, companies will look to identify indirect emission sources across their value chain, known as scope 3, including from suppliers, both physical and virtual. Scope 3 reporting is a complicated endeavor that many companies are not yet ready to tackle. But if your CSP is also making progress on its own green goals, such as by generating 40% of its energy through alternatives, its customers will also benefit and can account for that progress in their own scope 3 reporting. 

Consider cyber and privacy goals too. Similarly, a company’s data privacy and cybersecurity, often considered as part of the social or governance component of ESG, might be bolstered through a CSP arrangement. A CSP, for instance, may demonstrate a significant level of investment in these areas compared with what your company may have done in an on-premises data center.

The bottom line

Our survey makes it clear that cloud will be the next competitive frontier. Today’s value gap and return shortfalls will likely be nothing compared to tomorrow’s missed opportunities. Whatever your title, you have an integral role to play alongside your C-suite peers in defining, shaping and realizing cloud’s promise. Don’t just tie cloud to your business strategy; make it the change agent that can secure your future.

 

Sector snapshots

Industrials pursuing cloud value in product innovation, improved customer service

Manufacturers were well on their way toward Industry 4.0 before COVID-19 struck. The pandemic pressed the fast-forward button, accelerating digital, market, workforce and regulatory trends already in motion. With changing customer expectations, industrials are adjusting quickly and increasingly adopting a digital agenda. 

Accordingly, executives of industrial companies recognize the importance of cloud on numerous fronts, especially to drive rapid product and service innovation. But they have yet to realize it as an engine of innovation. Our PwC US Cloud Business Survey indicates that while nearly half of industrials (44%) are “all-in on cloud” and have scaled it throughout their businesses, the sector lags the cross-industry average of 50%. Just 19% of industrial sector executives say cloud has added substantial value to innovating products and services. This reflects that, while industrials understand they need cloud to capture all sorts of value (smart-factory transformations, growing portfolios of IoT-connected products, enhancement of customer experience), they also struggle to find where they’re yielding value at scale. 

Industrials capture cloud value in employee experience, product innovation and profits
Bar chart -  Industrials capture cloud value in employee experience, product innovation and profits

Q: To what extent have you realized value in those areas to date? Substantial value.  Source: PwC US Cloud Business Survey. Base: 141

Half of the industrial sector executives say just measuring cloud value is the biggest barrier to achieving that value. And, for most of them, cloud has been relatively peripheral to the core business, with just one in four agreeing that cloud is central to their business strategy and critical to revenue growth (e.g., advanced service design capabilities, deep product expertise, optimized workload differentiation). These findings suggest that there’s an enormous amount of potential value that industrial manufacturers can unlock beyond using cloud simply for infrastructure migration — things like accelerating product development and leveraging cloud in IoT- and software-related services tied to their products. 

As they race to develop smarter IoT-connected products and services, some industrial sector executives see cloud as key.

 

Nearly a third (29%) of industrial products leaders agree that faster innovation and delivery of new digital products and services is the primary method of measuring cloud value. Breaking the responses down by executive role (across industries) tells a different story about the lack of consistent alignment on cloud value: CIOs (39%), board members (23%), COOs (24%) and CFOs (19%). The apparent misalignment surrounding cloud value at the executive level could help explain why industrials aren’t fully realizing cloud value. When asked whether cloud adds substantial value to product innovation, for example, 40% of CIOs across industries agree that it does, compared to far fewer COOs (22%). There appears, then, a need to close the cloud-appreciation gap between certain leaders (particularly CIOs) and others, including board members and tax leaders.

Looking ahead, CIOs in the industrials sector are prioritizing cloud capabilities around cybersecurity (with 55% saying they’re doing so), which is unsurprising given that the increasing adoption of IIoT technologies has in turn increased the number of potential entry points for cyberattack. Transforming customer experience is also in their sights, with a third of industrials expecting cloud technology to drive better customer experience. Indeed, cloud will likely be integral to industrials as they seek to digitalize the customer experience by rapidly building (or expanding) their B2B and B2C e-commerce platforms over the next three years.

Consumer-facing companies look to cloud for revenue growth

Consumer-facing companies, among the hardest hit by the pandemic and resulting economic fallout, now face the challenge of restoring revenue growth as well as sustaining new revenue streams. They’re turning to cloud-based digital transformations to lead the way. Consumer markets (CM) executives in our PwC US Cloud Business Survey are far more likely than their counterparts in other sectors to measure cloud value via revenue growth (34% versus 19%). Their focus is appropriate because cloud’s greatest potential for CM companies could come from serving customers in new channels with greater convenience, generating new brand loyalty and greater trip frequency.

But change takes time. So far, just 11% of CM companies report realizing substantial value in using cloud solutions to increase profits, while 6% say the same for boosting innovation. The biggest cloud success to date has been improving resilience and agility, a timely business objective in the wake of the pandemic, with 19% of CM executives saying they’ve already realized substantial value (versus 16% overall). 

How consumer markets companies measure value
Bar chart - How your organization is primarily measuring value realized from cloud

Q: How is your organization primarily measuring value realized from cloud? Source: PwC US Cloud Business Survey. June 15, 2021: Total 524, CM leaders 130

What’s keeping CM companies from turning cloud solutions into bottom-line growth and consistent innovation? The top two reported barriers are a lack of alignment and clarity on roles and responsibilities relating to cloud ownership (68% versus 48% overall) as well as a lack of tech talent (68% versus 51% for all sectors). Other obstacles include governance, value measurement and stakeholder engagement. 

These obstacles collectively point to a common cloud challenge for CM companies. Procuring new cloud capabilities can be quick and can appear easier than previous challenges, such as building a new data center, transforming customer engagement, or deploying e-commerce or order management capabilities. But such apparent ease could lead to redundant cloud solutions, increased cost and integration complexity, which collectively can slow down operations or fail to deliver value.

In fact, cloud requires a broader transformation with new metrics, governance and organizational structures. When done well, we believe these measures can engage and align executives, attract tech talent and help the business choose cloud solutions that truly support revenue growth.

Financial services firms embrace cloud, but value proves somewhat elusive

Financial services has long been one of the more innovative sectors when it comes to applying technology to market opportunities and problem-solving. And many in the industry are embracing cloud as a key part of digital transformation.

When asked to describe how their organization views cloud, 38% of the financial services executives in our PwC US Cloud Business Survey tell us cloud is central to their business strategy and critical to revenue growth. That compares with an average of 28% for all sectors. The increased recognition of cloud as a means to strategic advantage indicates that cloud is moving beyond cost savings and productivity enhancement toward new capabilities and new business models. 

Financial services firms see cloud as revenue driver
Bar chart, statements that best describes how your organization views cloud

Q: Please select the statement that best describes how your organization views cloud.  Source: PwC US Cloud Business Survey. Base: 90

Nearly all of our financial services respondents (92%) characterize their company’s cloud maturity as high (have scaled it throughout the business) or medium (adopted cloud in many parts of the business). And 94% of the financial services firms are using more than one cloud service provider, compared with 71% for all sectors.

Despite the strong commitment to cloud, however, many financial services firms indicate they’re not realizing substantial value. Industry respondents had lower than average responses for enhancing employee experience, increasing profits and improving talent retention and recruitment.

What’s keeping financial firms from gaining more value? One of the biggest problems may be that most haven’t changed the metrics they use to reflect new benefits that are possible with the shift to cloud. Achieving the full benefits of cloud transformation requires change across the organization in culture, operating models, talent and skills. The constant is the focus on the customer and on business outcomes. Cloud provides the opportunity for faster innovation, scalability, data-driven insights and unique partnerships that, when anchored in the business strategy, can enable impressive products, services and customer experiences. 

TMT companies on the path to realizing value from cloud innovation

Technology, media and telecom (TMT) companies are using cloud solutions to build the foundations of long-term growth. More than companies in other sectors, our PwC US Cloud Business Survey finds that they’re realizing substantial value from cloud for data-driven decision-making. They, along with the health sector, are more likely to see meaningful returns in product and service innovation. 

Realizing value from cloud in data-driven decisions and innovation
Bar chart - extent have you realized value in those areas to date

Q: To what extent have you realized value in those areas to date? Substantial value.  Source: PwC US Cloud Business Survey. June 15, 2021: Total 524, TMT leaders 82

This success reflects TMT cloud priorities. Many executives across the sector (not just the handful of cloud hyperscalers) were first movers in identifying cloud solutions’ potential to transform existing lines of business and create new ones. 

As with any transformational technology, however, the challenge lies in extracting breadth of the value. Even though TMT companies are ahead of their counterparts in many sectors, they do encounter some hurdles. The main barrier TMT executives cite is poor integration with existing systems and data (50%), followed by governance challenges (47%), cybersecurity and privacy issues (43%), lack of upskilling (40%) and lack of talent (39%).

Because cloud transforms how an entire company operates, integration and governance challenges are common.

 

Going forward, top cloud priorities for TMT companies are artificial intelligence and hybrid cloud (both cited by 41% of TMT CIOs), necessitating improved integration and cloud-specific cybersecurity

The skills shortage isn’t going away either — and could result in the next digital divide. Companies that don’t address both the tech skills shortage as well as the broader impact on how people perform their jobs may find themselves on the wrong side. Still, only a little over half of TMT executives (55%) report having upskilling programs able to develop the cloud-related abilities they need, and only 11% are finding substantial success using cloud for talent retention and recruitment.

Looking ahead, we expect the key to cloud success will continue to be a business-first approach — finding cloud solutions for digital revenue streams, smarter ways of working, superlative customer experience and accelerated deal synergies.

Health industries seek resiliency through cloud transformation after pandemic

Among all the industries in our PwC US Cloud Business Survey, health industry leaders report the highest adoption of cloud with 61% telling us that their organizations are all-in on cloud and have scaled it throughout their operations. That compares with 50% of executives across all industries. However, given the wide possibilities cloud presents to help health companies build more resilient infrastructure or transform consumer experience, even those organizations that are all-in likely have room to advance using cloud.

The top focus of health leaders’ cloud strategies? Improving consumer experience. Forty-two percent of health industry leaders identify that as a focus, compared to 29% of all business leaders. Health systems, insurers and pharmaceutical and life sciences companies are focused on taking the lessons learned from the abrupt virtual and digital health explosion forced by the pandemic to fine-tune digital and in-person care. With cloud, they see opportunities to offer patients and their families more intuitive apps and tools that enable omnichannel, digital connections with clinical teams throughout treatment and beyond to critical elements of the healthcare system such as clinical trials. They also see cloud-enabled tools that can gather data from disparate sources to support clinical decision-making. Because we’re all already accustomed to using apps in our daily lives for everything from food delivery to step tracking, it’s not much of a leap to see how health organizations without these sort of options may risk being left behind.

Healthcare leaders eye improved customer experience as prime cloud opportunity
Bar chart - business outcomes have you been trying to achieve through your cloud transformation

Q: To date, which of the following business outcomes have you been trying to achieve through your cloud transformation? Source: PwC US Cloud Business Survey. June 15, 2021: Total 524, HI leaders 38

But there are barriers. Ransomware attacks cost the healthcare industry $20.8 billion in downtime in 2020 — also a year that logged the most ransomware attacks on healthcare providers in the past five years — so cybersecurity continues to be top of mind for health organizations. In fact, health leaders tell us cybersecurity and privacy are the top two barriers to achieving value through their cloud strategy. 

And as regulators push the industry toward interoperability, forcing more data-sharing between payers and providers than ever before and enabling patients to directly access their health records on their smartphones, industry leaders also see lack of integration with existing systems as a barrier to achieving value through cloud. Indeed, 39% identify that as an extreme barrier in the healthcare sector, compared to just 23% across all sectors. 

Energy and utility companies eye cloud to drive innovation, resiliency, ESG strategies

Energy and utility companies are looking to cloud to boost innovation and drive business strategy, yet its potential to do so has yet to be fulfilled. Nearly a third (31%) of the sector’s respondents in our PwC US Cloud Business Survey — when asked what best describes their organization’s view of the cloud — agree it’s a platform for innovation, including developing new products and services or capabilities. About the same number (29%) view it as central to their business strategy and critical to revenue growth. Roughly half (46%) describe their organizations as high on the cloud maturity curve and have already scaled it throughout the business to use for things like advanced service design, deep product expertise and optimized workload differentiation. These findings suggest that while many energy and utility companies have made notable progress with cloud, some have yet to think of cloud as the DNA of their organization’s strategy around cloud-based products and services and initiatives to help increase agility and revenue growth. 

The sector’s also encountering barriers. Interestingly — given deepening alarm over cyber attacks against the nation’s critical infrastructure — only 9% agreed that cloud creates security and business risks they need to address. At the same time, 40% of executives cited cybersecurity and privacy issues as a barrier to realizing cloud value.  

Over half (57%) of energy and utility respondents agree that a lack of tech talent is hindering their efforts to realize cloud value.

 

But opinions differ depending on executive role. Across industries, 58% of CIOs and 60% of COOs say lack of tech talent is a barrier to realizing cloud value, while just 28% of board members and 37% of CFOs agree. This disconnect may be holding some energy and utility companies from yielding more value from cloud. 

Over the next three years, 43% of sector companies expect cloud to drive the innovation of products and services (compared to 32% across all industries). These could include enabling field workers access to cloud-based maintenance and repair data as well as customer-accessible energy consumption data. The sector also expects the cloud will enhance  customer experience (31%) and ensure business continuity (31%).

Where energy and utility companies are focusing cloud efforts
Bar chart - business outcomes that will be most driven by your use of cloud technologies

Q: In the next three years, which business outcomes will be most driven by your use of cloud technologies? Source: PwC US Cloud Business Survey. Base: 35

About the survey

Between May 5 and May 12, 2021, PwC surveyed 524 US executives including CIOs, CTOs, CISOs and technology leaders (21%); CFOs and finance leaders (16%); CHROs and human capital leaders (16%); risk management leaders, including CROs and CAEs (13%); COOs and operations leaders (13%); corporate board members (11%); and tax leaders (10%). Respondents were from public and private companies in six sectors: industrial products (27%); consumer markets (25%); financial services (17%); technology, media and telecommunications (16%); health industries (7%); and energy and utilities (7%). Ninety-three percent of respondents were from Fortune 1000 companies.

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Jenny Koehler

Partner, US Cloud & Digital Leader, PwC US

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Ali Khan

Financial Services Advisory Principal, PwC US

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Venkatesh Jayaraman

Principal, PwC US

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Sundar Subramanian

Principal, Chicago, IL, PwC US

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