One of my favourite questions to ask a vendor selling cloud or an enterprise buying cloud is, “how much time does the CEO spend thinking about cloud, and in particular, the cloud they are trying to sell?
Many will answer confidently and without blinking an eyelid 15% of the business or 25% of what we do.
These numbers are nothing if one, unscientific, but two, ambitious and grandiose. 15 years ago, I used to have a slide simply entitled, “The other 95%.”
It is as relevant today as it was in 2008 and 2014.
Let’s relook at the other 95%. Assume that technology spending in the enterprise has grown to 10%. That is great; IT is more relevant than ever. It is no more relevant than HR, supply chain or corporate functions, manufacturing, sales and marketing. You get the drift.
The headline is good, but the reality is, IT could be 10% in an innovative Financial Services company or 1% in a sleepy manufacturing of widgets.
Then we get to the cloud. How important is the cloud? That is where the news is a little better. Cloud is about 20-25% of IT expenditure in mature markets such as Australia, Germany and the US. In emerging markets such as Indonesia, Saudi Arabia and Brazil, it is more like 10%. Let’s take 20% as an average.
So if 10% of the enterprise budget is IT, and 20% of the IT budget is cloud, then 2% is related to the cloud. So by that measure, the CEO should spend 2%, or about an hour a week, or 50 hours a year, worrying about the cloud. Not 20% of his or her time, but 2%. Any more and he is not spending the time on other equally valid parts of the business. That is all the clouds, not just the HR platform cloud, the CX, or the IaaS cloud.
You might tell me that the cloud drives digital engagement, CX, HR processes and many other things. Yes, it does. It is the point, more or less. This adds to the relevancy of the cloud, and the CEO should spend 50% more time. We are up to 3% of his/her time, or an extra 6 minutes daily.
How do we make the CEO want to spend more time on the cloud? I am glad you asked. Anyone who listens to me talk about technology knows I am obsessed with business outcomes. The best technology and cloud providers talk about business outcomes as well, but when the crunch comes, they go back to benefits such as quicker this or uptime that. That is not the discussion. That does not get 3% at best of the CEO’s invaluable time. Our industry has been too slow to develop and lead first with business outcomes. Business outcomes that are measurable, sustainable and real are the responsibility of all of us. The hyper scalers need to lead the way for the US financial services giants, as do the leading cloud providers for small businesses in India.
Focus Point
We need to remind ourselves just how important technology is for the running of the business. It is essential, but so is every other function. If we want to increase the relevance of technology and the amount of time the CEO is willing to spend on it, then we need to drive towards business outcomes inbuilt into all that we do. Governance and compliance have great business outcomes; they keep the CEO, board and others out of jail. IT needs to learn how to be just as valuable, but for the upside of the business and customer outcomes.