For years companies have been focused on the promise of cloud reducing costs and moving IT spending to an OPEX model. However, organisations need to rapidly turn their attention to how cloud can support top line revenue growth as part of their digital transformation strategy.
Customer demands are changing. They want to increasingly bank via their smartphones and shop online with rapid pick-up in-store options. Clearly there is still a need for the high street but consumers expect responsive, reliable websites that will serve their needs, suggest relevant promotions and offer great customer service. If customers enjoy their experience and it’s effortless, they will spend more, recommend your brand more, and become your advocate on social media.
> See also: How to scale your e-commerce startup
Canopy recently spoke to almost 1,000 CFOs, CIOs and Business Decision Makers in mid-market and large enterprises, 59% of which were listed companies, across the US and Western Europe. This was to explore the progress of digital projects in their business and how they are responding to these changing consumer habits.
75% of the CFOs estimated that their business is missing out on revenue opportunities by not having the right cloud applications and infrastructure in place to support digital business transformation, which they fear will lead to un-competitiveness by the end of 2015.
With the ferocious pace of start-ups, legacy businesses need to ensure their digital strategy is high on the board and business unit agenda. The risk of losing competitiveness is not in the future or theoretical, it is happening now and across all industries.
Organisations must scrutinise their operating models. They must analyse how they can use real-time analytics to make more accurate targeting decisions or improve customer experience. Canopy spoke to a large insurance firm recently who is adeptly using big data to improve policy pricing accuracy and using cloud to create new offerings, based on emerging trends and early adopter customer behaviour.
If companies procrastinate, digital up-starts will eat their lunch in a matter of months. Uber and Netflix are two disrupters making taxi rides and video streaming fun and accessible and it’s big business. Uber is valued at $17bn according to its co-founder Travis Kalanick.
If companies get their digital transformation right then there is a huge reward on the table. CFOs estimate they could grow their revenue in 2015 on average by around 10%, a staggering figure of around €120M (for a typical company surveyed who’s average global annual revenue today is €1.49bn). This would be if they implemented a more flexible cloud infrastructure and agile development of applications to support digital transformation.
Why cloud in particular? Because as companies in all industries, (automotive, apparel, retail, industrials, and finance), transition themselves into software businesses it allows them to sustain and accelerate the pace of this evolution.
> See also: 20 UK-based startups you should know about
If you’re a retailer you can develop a smartphone app that connects the digital and physical in-store experience for the shopper, ultimately to sell more products; if you’re an online bank you can deliver smaller but smarter updates to your website so consumers find your service transparent and competitive so you build market share. If you’re a restaurant you can deploy interactive software like e-Table so diners can do their own ordering, making the service fun yet efficient, so more covers are achieved per night.
These examples equate to top-line revenue growth and this is the prize worth fighting for in the digital battleground. We find that our most innovative customers have achieved a sharp gain in agility and the ability to refocus resources away from internal IT and towards growth. We will continue to see winners and losers as pioneering firms successfully make the transition to software businesses and digital disruption ripples throughout our economies.
Sourced from Jacques Pommeraud, CEO of Canopy