5 common cloud ROI challenges

Whatever the technology, we’ve found that chief information officers (CIOs) and other IT leaders have always been focused on delivering value. In last year’s KPMG Technology Survey, “proven return on investment (ROI)” was the most common motivation US respondents provided when asked about their technology investment choices.”¹

Yet it’s rare we speak with any business leader who doesn’t say they wish they had a better ROI from their cloud spend. So why the disconnect? If ROI is a primary focus, why haven’t they been able to meet ROI expectations?

¹ Source: KPMG US Technology Report, 2023

The explosion of data
Inefficient cloud business models
Cloud spending visibility
Security and reliability
Rethinking what’s not working

The result

Scalable data capabilities with one, centralized, rationalized set of data, regardless of the complexity or diversity of the underlying technology ecosystem—and a clear, compelling and achievable data modernization strategy that drives sustainable value over time.

Before:

Data is scattered across the enterprise—and outside, too—making AI implementations difficult and time-consuming, and robbing them of effectiveness. There’s a pervasive lack of data quality, a lack of trust in data, and low data literacy.

After:

A low-code integration-Platform-as-a-Service (iPaaS) solution combined with an application programming interface (API) management platform (APIM) dramatically speeds and simplifies the “plumbing” required to connect all the disparate pieces. A modern, cloud-based data platform provides real-time, automated extraction of data from each technology platform, translated into a common data model. DataOps automation and control principles and processes are applied.

Did you Know?

According to a recent internal pulse survey, 60 percent of AI users at KPMG report that generative AI (GenAI) tools enable them to allocate more time to valuable strategic tasks, thereby enhancing their productivity and creative output.

26K

KPMG users of Microsoft 365 Copilot

71%

Say MS 365 Copilot increases productivity

68%

use the tool in Teams meetings at least 1x/week

66%

say the tool accelerates the creation of a first draft

The result

An organization where cloud strategy, technology, process, policy, and culture are aligned across both IT and the business to control costs. And technology advances are more rapidly and reliably deployed.

Before:

Servers doing little or nothing as they operate continuously, running up costs. Data egress fees across multiple cloud providers balloon the cost of GenAI efforts. Costly custom features are regularly developed in response to business requests. Slow and costly software updates cause competitive disadvantages. Technology advances offered by hyperscalers are underutilized.

After:

An approach to optimize your cloud helps to control spend by closely matching resource allocation to demand. The migration of legacy applications is carefully evaluated for cost implications. Applications are designed to take advantage of newer capabilities offered by the major hyperscalers, including GenAI, containerization and infrastructure as code. Custom features are limited to maximize the use of these prebuilt services and their updates. Modern IT service delivery practices such as DevSecOps and DataOps reduce development time and cost.

The result

A well-governed and monitored cloud estate that uses automated controls to reduce and govern cloud spend and unlock a significant amount of value.

Before:

A lack of clear visibility and proper governance controls makes it easy to overspend on cloud. Oversized instances or orphaned resources can’t easily be identified. A lack of standardization in data platforms makes it difficult to leverage advanced analytics.

After:

FinOps aligns cloud spending with business objectives and helps to ensure that cross-functional teams work harmoniously to enhance financial control and predictability, reduce friction and deliver products and services faster. Baseline hourly costs of running a server are defined and continuously monitored. Data platforms are aligned and provide both at-the-moment spend visibility and spending forecasts, including more sophisticated forecasting, such as “what-if” analysis.

The result

A far more secure and resilient organization, with security and compliance “as code” solutions to help keep pace with the ever-changing nature of cloud investments and increase the velocity of your product deliveries.

Before:

Basic vulnerability patching by cloud providers creates a false sense of security. Systems are vulnerable to security breaches and failures, which can result in costly downtime or loss of customer trust.

After:

Effective strategies are defined and implemented to prioritize resilience for successful cloud adoption and management. Governance is established over the cloud security function. Critical business functions are identified, as are dependencies within your cloud infrastructure. Necessary control and compliance structures are established across cloud, hybrid, and on-premise systems. Leading recovery methods are in place to minimize downtime in the event of a failure.

The result

The cloud footprint is rebalanced to help improve efficiency and reduce waste. Untapped technologies enable advanced capabilities, enhanced performance, and new revenue streams.

Before:

Decisions made early in the cloud transformation process no longer align optimally with business interests. Inertia resulting from infrastructure complexity creates a feeling of lock-in.

After:

Revisiting your cloud strategy, this time with more experience under your belt, can help determine if the right applications were moved to the right locations, which technologies were leveraged most successfully, if new features or platforms might better serve the business, and whether or not you’re working with the right cloud providers.

How we help

Integrated capabilities for CIOs

KPMG helps you align your IT strategy with your business goals, modernize your applications and transform your infrastructure—and accelerate your cloud’s value.

KPMG Cloud

Align IT strategy with business goals, modernize your applications, transform your infrastructure, and accelerate cloud value to maximize ROI.

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KPMG Modern Data Platform

Apply modern DevOps principles such as Agile and CI/CD to your data, including practices, processes and technologies for building sophisticated analytics solutions and machine learning models.

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Cloud security, risk and governance

Achieve a “cloud first” approach that enables competitive advantage, reduces costs, drives innovation and empowers agility—all while meeting your regulatory compliance obligations.

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KPMG Application Modernization and Migration

A suite of advanced services, methodologies, applications and accelerators designed to help you build and migrate to a modern digital architecture.

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