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Why cloud governance is shifting to business stakeholders

Balancing value creation with innovation is a constant challenge for organizations. Here's what to consider when evaluating the long-term business value of cloud governance.

Cloud computing has evolved from being driven by cost savings to being motivated by value creation as business leaders embrace cloud applications as critical drivers of growth and innovation.

The current state of ownership and decision-making for cloud technology is shifting fast from the IT department to other business stakeholders, who now need the knowledge and skills to navigate the cloud computing ecosystem.

Cloud maturity and business stakeholders

Increasingly, business opportunities -- not just IT priorities -- influence cloud technology adoption.

Cloud computing is an integral part of how many companies do business. What began as a way for IT leaders to tap into powerful outsourced computing resources to bring down costs, boost resiliency and provide scalability has become something far more important. The cloud has become central to digital transformation, which itself is a pillar of business strategy, enabler of innovation and driver of growth.

In many organizations, business leaders turn to cloud computing applications to add new capabilities. Where the IT department looked for opportunities to drive cost efficiencies, business stakeholders are finding ways that cloud applications can boost revenue and profits. Essentially, we've reached the point of cloud maturity where IT is business and business is IT.

This trend means stakeholders outside the IT department have an ever-greater role in cloud adoption and implementation. But this raises potentially thorny yet critical issues regarding governance and organizational decision-making responsibilities. In the 2023 TCS Global Cloud Study, which polled nearly 1,000 senior executives from across business functions, two-thirds of respondents say cloud decision-making and responsibility is led by IT. But our study shows that is shifting.

Leaders must figure out how to generate sufficient engagement, ownership and sponsorship for cloud projects to support development and best practices within organizations.

The premium on cloud expertise

A shift in cloud ownership from IT to business could mean a significant premium on business leaders' tech savvy.

There is a growing expectation within businesses that every executive, leader or team member has a deep awareness and strong knowledge of digital capabilities. Though requirements are changing quickly, a certain level of expertise is a prerequisite as the business side plays a greater role in governing cloud computing.

Business leaders' expertise should include familiarity with cloud and cloud-based applications relevant to their specific sector and functions, whether in finance, manufacturing or HR. Training and upskilling is always appropriate and necessary to fill any knowledge gaps in leadership and competitive capabilities.

How cloud computing builds value

Readiness for cloud transformation can define the success of business leaders, contributing to value creation across the entire enterprise.

It is no longer appropriate to assume the IT team will manage all tech matters. Business leaders who think this way will be unsuccessful, and companies where this view dominates will miss value creation opportunities. Many CEOs already act and sound more and more like CTOs. We believe that for most companies, perhaps as soon as 2026, distinctions between the two roles might become the exception in as little as two years.

This shift from mostly IT ownership to joint decision-making with business stakeholders is likely the first phase of a tectonic shift, which might accelerate as the material distinctions between business and tech functions matter less and less. Those lines are already blurred, as cloud technology can affect a business's ability to grow, compete and thrive.

It is now up to organizations to make their visions of shared cloud ownership a reality and create a collective mindset that can transform traditional roles and responsibilities from the seeds of division to the fruits of shared success.

Parthiv Shah, global managing partner, Tata Consultancy Services

About the author

Parthiv Shah is a managing partner at Tata Consultancy Services. He has over 25 years of experience helping Fortune 500 companies drive global complex multi-tower business transformation initiatives.

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