Since the onset of the pandemic, business initiatives like automating operations, supporting fully remote workforces and creating new digital user experiences have flourished by necessity. In many cases, cloud is the reason companies could make the transition so quickly. Today’s cloud capabilities go far beyond data centers and cost savings. Because of newer features like artificial intelligence and machine learning platforms, companies are turning to cloud in droves to help them evolve faster.
As a result, board members will want to understand cloud’s role in driving business strategy and how the company is investing in this technology. They don’t need to know the finer points of public, private or hybrid cloud, but board members do need a clear view of how cloud strategy is linked to their company’s overall business strategy.
Cloud investments have grown exponentially in recent years, and a third of directors now view it as central to their company’s business strategy, according to PwC’s inaugural US Cloud Business Survey. Most business leaders have embraced cloud as the key to digital transformation. Yet more than half (53%) say they aren’t getting the full benefit of their cloud investments. That value gap is just one reason why boards need to keep a closer eye on this issue.
Cloud offers companies numerous benefits. Among those capabilities, directors rank improving resilience and agility (42%), innovating products and services (33%) and enhancing decision-making through better analytics (33%) as the top outcomes that companies are pursuing. Their answers reflect the critical role that cloud is playing in business transformation, innovation and resiliency.
For board members who haven’t heard much about their company’s cloud strategy, it may be time to ask management if, and how, the company can use cloud to develop new sources of value, operating models and ways of working.
For boards engaged in this topic, they’ll want to make sure they have a specific approach to overseeing this significant investment. They should make time on their agenda for discussing cloud’s role in digital transformation and company strategy. They should also be sure to get periodic updates from management on milestones and metrics for monitoring the achievement of value.
Aside from overseeing strategy, board members are responsible for understanding the significant risks their companies face, including those related to cloud. The most common cloud-related risks that boards tend to think about are cybersecurity and privacy issues, but there are talent risks, too.
When it comes to cyber risk, management is often more reactive than proactive in addressing it. Our survey indicates that business leaders consider the security, risk and compliance elements of cloud during the planning phase only 17% of the time. Most say they discuss these issues during business requirements gathering (37%). Board members can help by making sure management focuses on this risk much earlier.
The way cloud changes the skills companies need and the way employees work has talent implications as well. Companies will either need to upskill existing talent, recruit new talent or both. More than half of the executives in our survey (52%) cite lack of tech talent as a significant barrier to achieving value, compared with only 28% of board members. Boards will want to get behind this talent gap, discuss it with management and understand how cloud is driving changes to the talent strategy.