Cloud is so central to corporate strategy that it requires the full C-suite to be actively involved. And our PwC US Cloud Business Survey reveals that chief operating officers (COOs) have a prominent role here and are involved in a number of areas related to their company’s cloud transformation agenda. For one thing, COOs are often in line to become CEOs and sponsor or lead enterprise-wide business transformation initiatives. And because they’re involved in overseeing both customer-facing functions and applications as well as back-office operations, COOs wield responsibility for a number of aspects of their company’s business transformation, often in concert with other executives.
While collaboration across the C-suite is key to cloud strategy, our findings indicate that the COO may be the sleeper decision-maker.
COOs understand that cloud transformation is more than just moving workloads and applications to the cloud. They acknowledge the operating model and process changes that are needed (87% of COOs have decision-making responsibility here), along with the mindset shift of viewing cloud as a way to position the organization for agility.
There’s also an opportunity for COOs to take a larger role, particularly alongside the CHRO in people-related areas of cloud transformation like talent strategy and upskilling and in change management (66% and 61%, respectively, of COOs are involved here). These are crucial considerations as what could become the next digital divide takes shape. Companies will want to cultivate talent with the skills and the mindset to embrace the ways of working that cloud-powered transformation entails.
Nearly half of all the COOs surveyed say their organizations view cloud as a platform for innovation, including developing new products and services or internal capabilities, or as being central to the organization’s business strategy and critical to revenue growth. Likewise, a vast majority of the COOs (95%) rate their organizations’ cloud maturity as being either high (scaled throughout the business) or medium (adopted cloud in many parts of the business). Despite all of the investment, cloud initiatives are not always delivering the return companies expect. Our survey confirms that more than half of companies (53%) pursuing specific business outcomes through cloud have yet to realize substantial value from their investments.
COOs recognize that returns on investment (ROI) from cloud hinge on a focus of the areas that align with corporate strategy and provide differentiated value for the company. Beyond IT, 22% of COOs choose strategy as the most affected by cloud transformation, and an equal number believe all corporate functions will be equally affected. Making that crucial strategy connection and working with other C-suite leaders, especially the CFO, to articulate an investment thesis and how value is measured will be the key to help close the perceived value gap.
When asked where they expect cloud to have the biggest impact on operations over the next 12 months, more COOs expect results in improving customer service and experience (46%). Given that enhancing customer experience via cloud is a priority for so many companies today — 29% of companies tell us they plan to focus on that over the next three years — COOs are prepared to deliver.
It’s good news that executives, including COOs, see the potential in cloud transformation to drive innovation, yet there is still a gap between ambition and execution. And while there’s no magic bullet, every effort should be made to tie back to strategy and a shared understanding in the C-suite of what the company is trying to achieve. COOs will also focus on how value will be measured and the organizational investments and change that will be required to get there.
With their perspectives on much of the day-to-day operations, COOs are in a good position to help determine the extent to which cloud transformations can support their company’s environmental, social and governance (ESG) initiatives. Some COOs are looking at how the use of cloud service providers affects a company’s own emissions reduction goals. Many are also exploring how to use cloud for ESG reporting.
Creating a strong, cloud-based ESG reporting structure can differentiate an organization from its competitors and build confidence among customers, employees, business partners and others.
Most COOs (64%) say their companies are leveraging cloud to improve ESG reporting or have a plan in place to do so. And 70% of the COOs surveyed say their organizations are leveraging cloud to improve their ESG strategy or have created a plan to do this in the future.