CIOs lean on cloud as C-suite dependence on technology execution grows

CIOs lean on cloud as C-suite dependence on technology execution grows

Dive Brief:

  • Dependence on technology execution is growing as 95% of IT leaders say at least two of the C-suite’s top-three priorities rely on them, McKinsey found. The research firm interviewed technology leaders at 52 enterprises — 78% of which had at least 5,000 employees — earlier this year.

  • To achieve agility and increase the quality and reliability of services, CIOs are overhauling infrastructure stacks and see the cloud as the principal modernization enabler, according to the report. Already, surveyed companies have about half of workloads running on public and private clouds. By 2022, McKinsey projects that number will reach 75%.

  • Even with cloud migrations underway, about 80% of CIOs have not achieved the “agility and business benefits” expected with IT modernization, according to the report. CIOs, in part, blame an IT operating model built on legacy technology rather than modern stacks.

Dive Insight:

The growing reliance on technology speaks to urgency: McKinsey’s research found CEOs are prioritizing revenue acceleration and improved agility over reducing business costs. 

For businesses, cloud has emerged as a technology savior. Migrations to “as a service” models can end an expensive reliance on technology notoriously difficult to upgrade, let alone modernize. 

Take enterprise resource planning (ERP) systems, for example. Western Digital, in the process of consolidating three distinct corporate technology stacks, is migrating to a cloud-based ERP. Without the on-prem systems, upgrades can take place in the course of normal, day-to-day operations. 

In the past, companies would have been lucky to upgrade their ERPs every couple of years. 

Infrastructure moving to the cloud also makes businesses more agile. On-prem hardware maintained internally is unwieldy and resource intensive to change.

The cloud market — led in the U.S. by Amazon Web Services, Microsoft and Google — is increasing migration resources, relieving IT leaders from feeling the brunt of modernization complication. 

Technology providers have made modernization easier, but CIOs are facing challenges. Almost 60% of CIOs face technical and managerial talent gaps and half are constrained by security and compliance, according to McKinsey.

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