Trusting Cloud Technology and Better Business Performance are Related: The Economist
The Economist Intelligence Unit, a division of The Economist magazine, recently published a report on the correlation between the trust in cloud technology and business performance. The report, Trust in cloud technology and business performance, was sponsored by Google. The survey was taken from a group of 452 senior executives in leadership roles in companies around the world including the U.S., Australia, Brazil, France and the United Kingdom. The key findings of the report were:
- Cloud-based technology makes up 38% of enterprise IT, with this number expected to grow to 45% by 2017
- Trust in cloud technology is low, with only 16% of respondents indicating trust in it
- Very high-trust respondents had a key financial and non-financial metrics (revenue, profit, price share, etc.) growth of 9.1%, compared with just 1% in the low-trust group
- Cloud use alone doesn’t guarantee better outcomes, but trust in it does
- High trust companies appear to have more of an agility and willingness to change
- Active leadership of senior executives encourages high trust in cloud technology
The non-financial dividends shown in the chart above may be both a benefit of cloud use itself and a reflection of the company culture which allowed greater cloud technology adoption in the first place. Reputation and collaboration were the two highest growing non-financial metrics in the high-trust group. Cloud technology, such as Google Apps for Work, improves collaborative capabilities in all organizations significantly, but particularly in larger organizations where inter-departmental firewalls are set up that can prevent collaboration. Technology smashes these barriers and allows for all employee voices to be heard. Economist Intelligence Unit senior editor said “As organizations expand their use of the cloud, those with higher levels of trust are able to transform their organizations more quickly, and the resulting business benefits can be substantial.”
Capital Cost Reduction Cited as Biggest Benefit of Switch to Cloud
While the non-financial benefits are substantial, the balance sheet benefits were considered more impactful by survey respondents. Cost/capital expense reduction was cited as the largest benefit of the move to cloud technology by 40% of respondents.
This proves out the return on investment numbers which are frequently cited by Google in marketing materials for Google for Work.
How to Build Trust in the Cloud from Within
The overall low trust score in cloud technology - 16% - is due to a number of factors. Concerns about security and compliance with regulations are two very important ones. While these are both areas that cloud providers have shown to be at the same level of or better than legacy systems, senior level executives need to be educated on this before any movement is possible. The EIU report states that leadership from the top is necessary, as is introduction with an eye not just to training on the new systems, but to building trust in them. The EIU report suggests taking a common process and moving it to the cloud, so people in the organization can see how data is protected, how efficient the process is over use of legacy systems, and more. As with everything, the best advice is show, don’t tell. Leadership from the top is very important as well, and as of the survey, 45% of respondents stated that general management were the greatest impediments to cloud adoption. Cloud service providers have to bring senior level management on board before they can begin to provide cloud services to a company, since they will actively stand in the way of cloud adoption until they understand that it is more secure and efficient than legacy systems - showing them the better performance of companies with a high trust of the cloud can also lead to positive outcomes.
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