What Cutting-Edge Enterprises Want From Cloud: Analytics, Analytics, And More Analytics

Author

Joe McKendrick, Contributor

October 25, 2013

For inspired or forward-thinking organizations involved in cloud computing, cost savings and efficiency are just the icing on the cake. What they really are pursuing is something deeper to the business– to develop high-powered analytical capabilities. They look at cloud and see analytic opportunities.

That’s the key point surfaced in a new survey of 802 executives (evenly split between IT and business roles) was conducted by the IBM Center for Applied Insights in collaboration with Oxford Economics. The survey found that one out of five organizations is ahead of the curve on cloud adoption and achieving competitive advantage – not just cutting costs and driving efficiency – through cloud computing.

That 20% comprised of leading organizations are 170% more likely to use analytics extensively via cloud to derive insights for better business decisions, the study finds. These leaders are looking to the cloud to differentiate them from their competitors. In fact, they are 136% more likely to use cloud to reinvent customer relationships.

I like the way the report’s authors put it: “For leading organizations, cloud provides an escape route from the status quo.” That’s a status quo that consists of rigid and stagnant approaches to customer relations, product innovation and new business development.

Compared to more cautious cloud adopters, leading organizations are:

  • 117% more likely to use cloud to enable data-driven decisions
  • 79% more likely to rely on cloud to locate and leverage expertise anywhere in the ecosystem for deeper collaboration
  • 66% are using cloud to strengthen the relationship between IT and lines of business and the majority are using cloud to integrate and apply mobile, social, analytics and big data technologies.

The secret to successfully competing on analytics is making insights accessible to all decision-makers across the organization — not just the quants and C-level executives. Cloud increases the accessibility of data. Two-thirds of the cloud leaders say cloud plays a pivotal role in helping them make data-driven decisions.

Examples of cloud-based analytics cited in the report include TP Vision, a joint smart TV venture of Hong Kong-based TPV Technology and Royal Philips Electronics, that is storing data on customer preferences in the cloud to deliver insights that will provide personalized programming experiences for customers. Target Corporation is also cited for its use of cloud-based analytical services to make merchandising and marketing decisions. “The retailer can now see patterns – guest segments with very different wants and needs, such as health and wellness or feeding their families or satisfying high-end, gourmet tastes.”

These “Pacesetter” companies at the intersection of cloud and data analytics also are looking for even greater capabilities. The top three most valuable capabilities in their “cloud of the future” would be:

  • Product/service building blocks: Easy-to-assemble industry or business service components they can use to construct new products or services.
  • (Even bigger) big data: Access to– and management of – vast data stores they can’t get to now.
  • Industry-specific platforms: Cloud platforms with applications and computing environments designed specifically for their industry.

The survey also finds that the cloud’s strategic importance to decision-makers, such as CEOs, CMOs, finance, HR and procurement executives, is poised to double from 34% to 72% – vaulting over their IT counterparts at 58%.

The survey also finds that organizations gaining competitive advantage through high cloud adoption are reporting almost double the revenue growth and nearly 2.5 times higher gross profit growth than peer companies that are more cautious about cloud computing.

IBM also calculated the value drivers for the three levels of cloud adopters, and the differences between leaders and laggards:

“Chasers” “Challengers” “Pacesetters” Gap between chasers and pacesetters
Use analytics extensively to derive insights from big data 20%  44% 54% 170%
Reinvent customer relationships 25% 46% 59% 136%
Share data seamlessly across applications 27% 51% 59% 119%
Make data-driven,
evidence-based decisions
30% 62% 65% 117%

Source: Under Cloud Cover: How Leaders are Accelerating Competitive Differentiation, IBM Center for Applied Insights, October 2013.

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