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CIOs and technology leaders

CIOs as chief educators and conveners for cloud-powered transformation

To fully capitalize on cloud, companies need to identify the business outcomes they’re looking to achieve and then figure out how cloud services can help them attain their goals faster, more cost effectively and at scale. CIOs are taking ownership of much that has to do with cloud at their organizations — but so are lots of other senior executives. PwC’s US Cloud Business Survey reveals just how engaged other C-suite leaders are around cloud.

All respondents were asked about which aspects of their company’s cloud transformation they are responsible for or involved in. With regard to company-wide strategy and defining the business outcomes and value expected, 93% of the CIOs say they have decision-making responsibility or ownership, either in conjunction with others or independently. Many other executives echo that view — and even board members see themselves having a considerable role.

Having a shared responsibility for cloud decision-making or ownership is critical to overcoming the “cloud value gap” — our finding that more than half of companies (53%) surveyed aren’t realizing a substantial return on their cloud investments.

At the heart of this issue is a lack of integration with strategy, and we’re finding that the C-suite must make strategic choices about how and where cloud will bring differentiated value. That’s why it’s so important for CIOs to work closely with COOs, CFOs and tax leaders, among other executives. CIOs play the pivotal role of educating and convening their C-suite peers around cloud decisions. CIOs may, for example, find it especially effective to identify the handful of pivotal executives and work one-on-one with them to develop the knowledge and confidence required for making cloud decisions that better support business strategy.

Bar chart titled
CIOs share cloud decision-making across the business
CIOs
Business leaders
Board members
Company-wide strategy and defining the business outcomes and value we expect
%
%
%
Investment decisions, budgeting and value realization
%
%
%
Service provider selection
%
%
%
Developing products, services and other customer-facing capabilities
%
%
%
Change management
%
%
%
Talent and upskilling considerations
%
%
%
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, Business leader base of 358, Corporate director base of 57

Coming to a shared understanding in the C-suite

With executives split on how their organizations primarily measure value from cloud, CIOs have work to do to help get everyone on the same page. For CIOs, it’s faster innovation and delivery of new digital products and services (39%). Other executives, including CFOs, COOs and CHROs, look at improved revenue (23%). While the two aren’t mutually exclusive — cloud-based products and services should yield additional revenue — having a shared understanding of how the organization measures value is critical.

CIOs are more in sync with board members, who also assess cloud by its ability to drive faster innovation. Yet, while boards may be confident in their company’s digital strategy — as indicated by the 65% of board members telling us so — we recommend that CIOs talk with them about whether their company is building the appropriate business capabilities to deliver on that strategy.

Executives also differ somewhat when it comes to barriers to achieving cloud value. CIOs cite a lack of technology talent as the top barrier, while CFOs blame a lack of integration with existing systems and data. Tax leaders select governance challenges and human resources executives cite a lack of ability to keep executive stakeholders engaged.

There are other potential benefits to collaboration. Consider that just 38% of CFOs say they’re very confident in pursuing research and development tax credits for cloud investments. The R&D credit against US- and state-level income taxes can equate to significant savings back to the company for certain innovation-related costs. This can be a dollar-for-dollar reduction against cash tax outlays. CIOs should work closely with CFOs and tax leaders to help optimize how they finance cloud investments.

Bar chart titled
CIOs measure ROI by innovation, other executives focus elsewhere
CIOs
Business leaders
Board members
Faster innovation and delivery of new digital products and services
%
%
%
Improved operational resilience, safety and soundness
%
%
%
Cost savings and efficiencies
%
%
%
Ability to execute on our strategy to fundamentally change the business
%
%
%
Increased revenue
%
%
%
We are not specifically measuring value because cloud is seen as a necessary business foundation
%
%
%
Q. How is your organization primarily measuring value realized from cloud? Source: PwC US Cloud Business Survey. June 15, 2021: CIO base of 109, Business leader base of 358, Corporate director base of 57

Cultivating an optimal cloud environment for growth

Developing an effective cloud strategy means making a lot of difficult decisions, and among the most important are how many and which types of cloud services to use, which cloud providers to select and what sort of approach to take when moving business applications to cloud.

Most CIOs (71%) report that their companies use more than one cloud service provider (CSP), and two-thirds take a public/private cloud approach. This is no surprise, given that multi-cloud strategies have hit a stride over the past year and hybrid cloud environments are generally considered the ultimate direction of choice for many enterprises. 

Leveraging multiple cloud providers and different types of cloud services gives organizations greater flexibility, something they’ve certainly needed during the pandemic and the resulting remote work or hybrid work models. On the other hand, operating a multi-cloud infrastructure increases complexity, and vendor/contract management can be especially challenging for companies with limited resources.

CIOs are more divided on their application approach. Nearly two-thirds tell us they’re concentrating on modernization and rewriting their applications to take advantage of cloud. Fewer are focused on developing new cloud-native applications, and about half are focused on migration, moving existing workloads to cloud.

How companies are implementing cloud
Two pie charts and bar chart describing your company’s cloud vendor strategy and application approach

Note: Totals may not add up to 100% due to rounding. Q: Describe your company’s cloud vendor strategy and application approach. Source: PwC US Cloud Business Survey. June 15, 2021: CIO base of 109

Cybersecurity and AI lead tech capabilities priority list

Virtually every facet of IT is now available as a cloud service, and CIOs and other tech leaders should be prepared to decide which capabilities to procure through these services. When asked which cloud capabilities they’re prioritizing for the next 12 months, 48% of CIOs put cybersecurity at the top of the list. In our 2021 US Digital Trust Insights survey, which delves more deeply into the topic, CIOs and CISOs rank cloud security as their most important investment area as they prepare their organizations for the next two years. At the same time, just 46% say they’ve mitigated risks associated with accelerated cloud adoption.  

Other capabilities CIOs are prioritizing include hybrid cloud and artificial intelligence/machine learning (AI/ML) (39% each). As businesses try to identify and exploit viable use cases for AI/ML, cloud gives them the storage, compute and analytics capacity they might not otherwise be able to access. In fact, data analytics was next in the list of cloud capabilities CIOs are prioritizing, at 37%. We expect the continuing deployment of big data projects will keep cloud-based analytics in high demand for years to come.

Bar chart titled
Top cloud capabilities companies are betting on
Cybersecurity
%
AI and machine learning
%
Hybrid cloud
%
Data analytics
%
Enterprise applications
%
Developer environments
%
Containers
%
Storage
%
Compute
%
Serverless
%
Data lake
%
Q. Which cloud capabilities are you prioritizing in the next 12 months? Source: PwC US Cloud Business Survey. June 15, 2021: CIO base of 109

The digital talent divide — inside and outside of IT

The technology skills gap has been a challenge for CIOs for years. While in some ways cloud might help to ease that by eliminating the need for some areas of expertise, such as data center technology know-how, it also creates a need for new skill sets unique to the cloud.

While some CIOs seem fairly optimistic about their organization’s status when it comes to having or developing skills for cloud, there’s still a clear need to fill the talent gap. Indeed, only 36% of the respondents say they have the cloud-related skills and expertise they need in-house, and more than half (57%) say they’ve put upskilling programs in place to help develop the cloud-related skills they need.

Forty-six percent of the CIOs tell us their organizations have change management programs in place to help them address cloud’s impact on how employees work, and slightly more than half say they have the right mix of functional and technical skills to enable cloud innovation.

30% of tech leaders say a lack of cloud talent is affecting their organization’s ability to deliver on cloud strategy, and 39% plan to rely on third parties to help them with cloud migration and modernization.

The talent gap is not limited to technology but exists across organizations. In fact, if enterprises are changing processes and ways of working, it’s often a much bigger challenge than in IT. Critical to success is developing new ways of thinking and working, moving from a traditional process approach to a product approach that leads with agility, innovation and customer focus. 

For companies embarking on a cloud strategy, it’s important to note that cloud transformation fundamentally changes how organizations operate. Taking those changes into consideration, leveraging outside expertise that has knowledge of the company’s industry as well as cloud service and technology competence, is important.

Bar chart titled
How CIOs see the cloud talent challenge
We have upskilling programs in place to help us develop the cloud-related skills we need
%
We have the right mix of functional and technical skills to enable cloud innovation
%
We have change management programs in place to help us address cloud's impact on how we work
%
We will rely on third parties to help us with cloud migration and modernization
%
We have the cloud-related skills and expertise we need in-house
%
A lack of cloud talent is affecting our ability to deliver on cloud strategy
%
We are targeting a headcount reduction in IT as a result of cloud
%
Q. Thinking about cloud-related skills and technology talent, which statements are true for your organization? Source: PwC US Cloud Business Survey. June 15, 2021: CIO base of 109

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Jenny Koehler

Partner, US Cloud & Digital Leader, PwC US

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Will Perry

Principal, Atlanta, PwC US

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Ali Khan

Financial Services Advisory Principal, PwC US

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Venkatesh Jayaraman

Principal, Cloud & Digital Strategy Leader, PwC US

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