Deloitte’s Donal Óg McCarthy: ‘Cloud is a strategic driver of business performance’

5 Dec 2018

Donal Óg McCarthy, Deloitte director for technology consulting. Image: Deloitte

Attitudes to the cloud have changed among CIOs, says Deloitte’s Donal Óg McCarthy, with the technology now seen as a business enabler.

Donal Óg McCarthy is a director in technology consulting at Deloitte focused on digital transformation. He has more than 15 years’ technology consulting experience supporting clients in Europe, North America and Australasia. He leads a multidisciplinary team delivering technology strategy, architecture and development projects to clients in public sector, private sector and financial services.

He has responsibility for the cloud development and integration capability within Deloitte Consulting, supporting the management of the practice as a senior leader within the technology business.

‘Cloud is a key enabler for these transformative steps, allowing organisations to elevate customer experiences, creating new products, services and business models’

Deloitte’s latest Global CIO Survey revealed that 41pc of CIOs believe they are underinvesting in cloud and almost two-thirds believe their IT organisations’ cloud skills to be average or below average. Crucially, 75pc anticipate that their cloud spend will increase in the next two years.

What are the biggest findings to emerge from your CIO study?

The 2018 Global CIO Survey was conducted across 71 countries with 1,437 technology and business leaders, with an aim to better understand the impact and legacy of the CIO role. This year’s report builds on two previous surveys of more than 1,200 global CIOs and explores how CIOs can shift from trusted operators to leading business growth and transformation within their organisations.

In 2018, there have been immense changes brought about by the digital era. Nowhere is this seen more than in Ireland, where our economy is growing three times faster than the wider EU area, according to the latest EU estimates.

This year’s survey shows that more than half of CIOs continued to be focused on operational excellence and the delivery of reliable technology operations. The rapid changes occurring in this digital era will challenge CIOs to redefine their roles, ensuring they are at the forefront of growth and transformation within their organisations.

Only 10pc of CIOs represent digital vanguard organisations, which are those market-leading organisations where technology has been successfully incorporated into the heart of the digital business strategy. These organisations are best placed to take advantage of emerging technologies with a clear vision of how IT can support the growth of their business.

It is critically important that the CIO is involved in the development and execution of the digital strategy. However, 60pc of CIOs surveyed indicated they did not have a leadership role in the development of their enterprise digital strategy.

How much of the CIO community has migrated to the cloud in a significant way, and is this fully fledged or in a hybrid kind of way?

90pc of CIOs report that they are using cloud in some way within their organisation. There are varying degrees of migration to the cloud and this is very much dependent on the specific drivers those organisations are using to move to cloud.

Hybrid cloud is a valid approach for many organisations where the ultimate goal is to be able to move applications and systems seamlessly between environments. Improvements in cloud integration technology allow organisations to benefit from the best of both worlds, taking advantage of the agility, scalability and performance of the cloud while keeping on-premise systems for storage.

It is important that the benefits of moving to the cloud are clear from the beginning, whether cloud is seen as a potential to reduce cost or it offers the business greater opportunity to deliver scalable solutions to the market quicker. Moving to cloud is not just a technology journey, and a clear set of business drivers must be part of any migration strategy.

The complexities of managing legacy core systems means that the time for hybrid cloud will continue and this will certainly allow CIOs to leverage those parts of the cloud that will help support their organisation’s business growth.

From being a concept a decade ago, most of us are totally at ease with the cloud and see it as more tangible and practical than traditional storage. Would you say it is the same for CIOs?

Today, CIOs are certainly aware of the power that cloud can bring; however, there are definitely varying levels of comfort when it comes to adopting a cloud-first strategy. This can be down to a number of factors, including concerns around data residency, regulatory constraints specific to their sector and the risk appetite of the organisation.

Deloitte works with clients to support them in defining their cloud strategy, working through technical and business challenges, ensuring the organisation moves as one to the cloud with clearly defined technology and business drivers for cloud adoption. This can be critical in ensuring cloud is embraced across the organisation.

It is true to say that in the early days, cloud would have been seen as purely a way to cut costs. However, over the past few years, this has completely changed. Cloud technology is now seen as a strategic driver and a real enabler of business performance.

Cloud is no longer just a conversation for the CIO/CTO but is now a board-level concern, having the power to enhance organisational performance and disrupt; offering new revenue streams, greater profitability and, most importantly, increased responsiveness to customers.

What are your thoughts on the role cloud is playing in digital transformation journeys?

If we consider what we mean by digital transformation, we are really talking about helping clients to rapidly adapt, gain advantage and grow revenue in this digital era.

Cloud is a key enabler for these transformative steps, allowing organisations to elevate customer experiences, creating new products, services and business models. The depth and breadth of the building blocks available on the cloud today mean that organisations can rapidly deploy scalable solutions to their customers in a fraction of the time previously possible.

We can see this evidenced in our survey results, where over 70pc of respondents indicated that improved business agility and increased scalability were their key drivers for moving to the cloud. This trend will continue as the importance of providing frictionless, responsive experiences to customers will be seen as just the norm, and organisations that can respond to their customers’ needs quickly will continue to be seen as the market leaders.

Companies such as Amazon have made the latest wave of IT possible, and players such as Google see cloud as the next trillion-dollar industry. What shape will the business of cloud take in the coming years?

Cloud technology will continue to evolve rapidly over the next few years. The pace of change, especially in SaaS and PaaS services, will offer significant benefits to rapidly design, build and deploy new products and services.

We can see today, especially in the area of cognitive services, where the increased processing power of cloud and the outsourcing of data storage is supporting organisations to leverage the power of artificial intelligence and machine learning at scale within their products and services.

Cloud providers will continue to embed cognitive capabilities within their core platform services, leading to an exponential growth in the number of commercial AI-powered applications, all leveraging the scalability, security and performance of cloud.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years