Accenture Unleashing Competitiveness on the Cloud Continuum

Ever–ready for every opportunity How to unleash competitiveness on the Cloud Continuum Ever–ready for every opportunity From insights to action, the path to extraordinary value starts here. 1

Contents 3 Introduction 14 01. Know where you want the Continuum to take you 4 Putting the building blocks in place 21 02. Establish cloud practices to support and augment your technologies 7 Meet the Continuum Competitors 28 03. Accelerate innovation to deliver exceptional experiences 10 Overcoming the obstacles 33 04. Provide continuous strategic commitment 12 Four keys to unlocking the potential 37 Reinventing on the Continuum of the Cloud Continuum 39 Appendices Ever–ready for every opportunity 2

Full speed ahead Organizations are reimagining their futures with cloud in extraordinary circumstances Organizations’ resilience has been tested Regardless of the reason, everyone is like no other time in recent history, as the migrating while their industries and pandemic has changed how we live, consume businesses are in 昀氀ux—with key functions and work. Transformation is the new normal. such as customer service and supply chains facing new demands every day. It’s 吀栀at’s why many organizations are akin to a ship rebuilding its engine and reimagining their businesses by migrating retraining its crew, while somehow trying systems and applications to the cloud. Some to maintain its speed and course through a want to automate processes, scale capaci琀礀 ferocious storm. and create new growth opportunities. Others are migrating simply for cost savings and greater e昀케ciency. Ever–ready for every opportunity 33

Putting the building blocks in place 吀栀e good news, however, is that cloud migration is worth the e昀昀ort— and shows impressive results. Ever–ready for every opportunity 4

Viewing cloud as a Continuum New operating models can support the ever-changing needs of business Our global survey of about 4,000 respondents found nearly 65 percent saw different types of ownership and location (from public to private or hybrid up to 10 percent in cost savings from cloud migration, on average. We also to co-location to multi-cloud and edge), all dynamically supported by next- found the pandemic has led many organizations to undergo compressed generation connectivity such as 5G and software-de昀椀ned networks. transformation. That is, they’re accelerating the migration of their workloads to the cloud in months, not years. Over the next three to 昀椀ve years, more This subset of organizations harnesses the Cloud Continuum to envision a than two-thirds of workloads will shift to the cloud, with about a third of continuum in their journey—from on premises to cloud migration to growing organizations moving more than 75 percent into the cloud across most and innovating with the cloud. regions of the world. They are able to extend the Continuum vision to their entire technology Almost all organizations in our survey have some presence in the cloud stack, from infrastructure, to network, to their applications, and beyond. today. But a small subset of them—about 12-15 percent of respondents depending on region—are seeing substantial gains from their continued cloud engagement. They’re bene昀椀tting even amidst global disruptions. Continuum Competitors make choices For them, cloud isn’t just about on-demand compute, storage and network, from across the Cloud Continuum as it was 10 years ago. Even 昀椀ve years ago, cloud mostly involved choosing public shared data centers. This subset of organizations recognizes the to create a seamless technology and cloud as a launchpad for innovating and new ways of operating. capability foundation that supports the They understand that the cloud is a continuum of capabilities that span from ever-changing needs of the business. public to edge—and everything in between. This Cloud Continuum includes Ever–ready for every opportunity 5

Figure 1: What is the Cloud Continuum? Private Compliance Privacy Efficiency Hybrid Multi Distributed Private Data Public CLOUD Computing Center Cloud CONTINUUM Innovation Latency Scale Latency Compliance Innovation Experience Elasticity Untethered Privacy Scale Public Legacy Elasticity Edge Distributed Centralized SDN Centralized & Distributed From To Historically, cloud meant public cloud and shared data centers. Today, most The Cloud Continuum includes a spectrum of capabilities and services from public organizations deploy some mix of public, private and edge clouds based on their through edge and everything in between, seamlessly connected by cloud-昀椀rst networks, needs – with very little integration among them. As a result, innovation, data and and supported by advanced, Cloud Continuum practices. The array of technologies best practices realized in one part of the organization doesn’t bene昀椀t others, that makes up the Cloud Continuum varies by ownership and location, from close to the impeding value. enterprise to completely off-premise. Cloud-昀椀rst 5G and software-de昀椀ned networks unify the Continuum, allowing access to the cloud from virtually anywhere and ensuring that Note: Bubble sizes are illustrative only and do not indicate degree of adoption there are no silos among private, public, hybrid, edge or multi-clouds. Ever–ready for every opportunity 6

Meet the Continuum Competitors We call these organizations Continuum Continuum Competitors are: Competitors because they are using the • Two to three times more likely to innovate and cloud not just as a single, static destination, re-engineer knowledge work but as a future operating model. • Achieving between 1.2x (North America) to 吀栀ey’re transforming how they interact 2.7x (Europe) greater cost reduction than with customers, partners and employees; migration players how they make and market their products, • Up to three times more likely to use the cloud for services and experiences; how they build at least two sustainability goals, such as using and operate their IT systems; and they’re green energy sources, architecting for lower power reimagining the role of data and compute. consumption and utilizing servers better for a lower energy footprint Critically, this approach allows them to outpace their peers on many fronts. They also aim to achieve more operational and 昀椀nancial goals, targeting up to 50 percent more business measures such as increasing customers and going to market faster than their peers. Our complementary research on technology Leaders and Laggards documents a similar digital achievement gap. While technology Leaders were growing revenue at 2X that of Laggards in the years before the pandemic, they have Ever–ready for every opportunity grown at 5X that of Laggards in the past three years. For 7 more see Make the Leap, Take the Lead

10 Continuum Creating the future Competitors you choose y) 5 Continuum Competitors secure their enviable position through o industr a combination of 1) choosing the right type of cloud and cloud- e t based services across the Continuum to address business elativ needs, and 2) implementing advanced practices to leverage s (r 0 those technologies, which allows them to use the cloud to propel actice innovation and business growth (Figure 2). This enables them to reimagine and reinvent their business altogether through continuous innovation, powered by various -5 types of cloud capabilities that operate seamlessly across Cloud Continuum pr Migration only the Continuum. In other words, Continuum Competitors take advantage of cloud capabilities and develop the mindset of applying them across their business, to create a unique market position. -10 -15 -10 -5 0 Wherever you are on your cloud journey, it’s important to Adoption of cloud and cloud-enabled technologies (relative to industry) understand the Cloud Continuum—and this report shows the opportunities available if you leverage it. The choices you make, along with the speed and pro昀椀ciency of execution, will Figure 2: Finding Continuum Competitors dictate whether you lead or follow in the next three to 昀椀ve years, Continuum Competitors (purple dots) distinguish themselves from beginners on the accelerating growth during less tumultuous times and better Continuum (black dots) and those still in migration (grey dots) by getting two things right: positioned to withstand unexpected future shocks. Choosing the right type of cloud and complementary technologies from across the Continuum, and implementing advanced, Cloud Continuum practices to leverage those technologies. These decisions enable them to quickly adapt to changes by capturing feedback on products and services on an on-going basis. Ever–ready for every opportunity 8

25 technologies Six practices enabled by the Cloud Continuum for the Cloud Continuum A spectrum capabilities and services from public through edge and everything in between Advanced cloud practices that support permanent reinvention (see horizontal axis in 昀椀gure 2) (see vertical axis in 昀椀gure 2) Cloud AI and Automation Feed-it-forward Agility: Speed time to future • Cloud SaaS • Deep Learning markets, again and again • Cloud IaaS • Physical Robots • Cloud PaaS • Vision Systems Continuous Goals: Alignment is continuous, • Hybrid Cloud (mixed computing, storage, and • Natural Language Systems not episodic services environment made up of on-premises • Tiny ML infrastrcture, private cloud services, and a • Federated Learning Cloud-昀椀rst Apps: Cloud’s the developers’ public cloud) • RPA (Robotic Process Automation) default • Serverless Computing Security • Cloud Native Applications Talent Transformation: Compress • Containers • Cyber Threat Intelligence (CTI)/Active Defense transformation continuously • Microservice Architectures • Endpoint Detection and Response: • Multi-cloud • SIEM (Security Information and Event Management): IT Experimentation: Unremittingly upgrade Real-time Data Capture and Analysis • Trust-based Architectures experiences • Data Lakes (data repository) • Streaming/real-time data Internet of Things Scale Awareness: Predict the power • Internet of Things (IOT) requirements for new generation of Cloud-AI • Big data analytics • Edge/Fog Computing Services Ever–ready for every opportunity 9

Figure 3: Overcoming the obstacles Top pain points of cloud adoption What are the challenges holding organizations back? Expanding operations in the cloud is not easy. The sheer complexity of managing the business and operational change that goes along with the cloud, 昀椀nding the right level of security to match your There are many reasons why migration itself can be dif昀椀cult and slow (Figure 3). operating environment, and aligning IT and business emerge as It’s challenging enough to navigate complex legacy systems; change business top challenges. These challenges keep organizations from rapidly and operating models; evolve architectures, applications and data; reskill your expanding cloud adoption and leveraging the Continuum. workforce; and comply with regulations. Then there’s cyber-risk. Cyber-security management is getting better all the time to the extent that cloud providers are much better at providing hardened security Complexity of business 42% than what’s achievable on-premises, but many organizations still worry about and operational charge lost or compromised data. And they are even more sensitive when it comes to migrating employee and customer data to the cloud. Security and 42% Compliance risk But there’s also widespread misunderstanding of the long-term value of being in the cloud. Some look at the cloud simply as a cheaper data center. Misalignment between 35% IT and business Others have the notion that leveraging cloud for next-generation technologies is too experimental and just not for them. Legacy infrastructure 34% challenges Data sovereignty 32% concerns/regulations Ever–ready for every opportunity 10

Shaping the future Strategic leaders are discovering how to capitalize on the Cloud Continuum The result is a gap between action and opportunity: Although a majority of organizations are migrating, they are not exploiting the cloud to its full extent. Those that are advancing their cloud engagements, however, are leading—and even shaping—their industry transformations and pulling farther ahead of their competitors. What’s more, our research shows that organizations don’t have to be so-called digital natives to move quickly and effectively in this space. For instance, 3M, Starbucks and Roche all are Continuum Competitors. Right now, true Continuum Competitors (purple dots in Figure 2) are These approaches are applicable to any few and geographically scattered. When we studied their perspectives organization in the cloud, whether and actions regarding the cloud, as well as those that have started to move beyond a migration mindset (grey dots in Figure 2), four key they’ve just started their journey or are approaches emerged. well on their way. Ever–ready for every opportunity 11

Four keys to unlocking the potential of the Cloud Continuum No matter your industry or geographic location, migrating your systems and applications to the cloud is the first step toward gaining a competitive advantage. Cost savings are often a primary driver, but it is ultimately a limiting, competitive disadvantage to look at cloud simply as a cheaper, more efficient data center. There is more to the cloud than savings (Figure 4). Ever–ready for every opportunity 12

Figure 4. Bene昀椀ts of Expanding on the Continuum What propels For organizations that are leveraging the Continuum by using cloud and your journey cloud-based technologies in more signi昀椀cant ways, the bene昀椀ts include bottom-line savings such as cost reduction and increased speed to market, beyond? and top-line growth in sales via cross-sell and/or up-sell. The percentages are based on responses regarding adoption of 25 technologies enabled by Some steps toward becoming a Continuum the Cloud Continuum and six Continuum practices. Competitor are clear-cut. Others less so, but our global survey and in-depth executive interviews clearly demonstrate the Continuum potential and mindsets of those that recognize Continuum: and exploit it. Cloud is a permanent commitment to reinvention Before you get started, however, the 昀椀rst Migration-only: step is to understand the nature of the Cloud is a fixed destination Cloud tech adoption: 72% Cloud Continuum: Speed and change are its Continuum practices: 77% fundamental facets. Continuum practices that On-premises: Cloud tech adoption: 40% Key benefit: Cost reduction, can harness the continual improvements and Cloud is not a priority innovation, speed to market, expansion of cloud capabilities are crucial. Continuum practices: 38% cross sell & up sell, Cloud tech adoption: 0% Key benefit: Cost reduction diversification and more. Continuum practices: 0% Key benefit: Keep the lights on Here are the four keys to Continuum success Ever–ready for every opportunity 13

01 Know where you want the Continuum to take you The greatest danger for most of us is not that our aim is too high, and we miss it, but that it is too low, and we reach it. Michelangelo Ever–ready for every opportunity 14

Your vision made real Your Cloud Continuum strategy can help you realize your business potential In order to achieve the full potential of your enterprise in the cloud, it’s But all that’s easier said than done. Simply understanding what important to develop a Continuum strategy that gets three things right: capabilities are even available on the Continuum can be hard, let alone 昀椀guring out how to use them. However, given the continually • A vision that clearly states the core values and future aspirations expanding possibilities the Continuum has to offer, it’s important to draw up clear priorities, which act as guardrails to keep different parts • An identi昀椀cation of competitive vulnerabilities and shortcomings of an organization moving in the same, desired direction. • A clear classi昀椀cation of capabilities, relative to where your Continuum Competitors lead the pack not just in formulating organization is today versus its future aspirations, leveraging the ambitious visions, but also at realizing them. For example, in North full extent of the Continuum America, Asia and the Latin Americas, Continuum Competitors aim for more ambitious 昀椀nancial and operational goals (e.g. faster time To start, draw up a Continuum strategy. The Continuum is not just one to market, increased cross sell or up sell, and increased number of technology, but many—each with its own strengths and limits. Some customers). And, they are more likely to have realized greater levels of organizations may be oriented toward hybrid cloud with some core tech adoption, such as more widespread use of AI in knowledge work. systems operating in a private cloud environment, but with AI, ML and Continuum Competitors are: natural language processing (NLP) leveraged in the public cloud for improved user experience. Others may leverage edge computing on 5G networks to reduce manufacturing defects at remote factories. 3.3x more likely to have adopted AI-augmented knowledge work. Ever–ready for every opportunity 15

Siemens makes the right connections That’s the situation at Siemens AG. The 174-year-old company’s rapid pivot to Industry 4.0 and becoming a highly advanced industrial manufacturer a few years ago was largely enabled by the Cloud Continuum. Siemens made the decision to help engineering and manufacturing companies use vast amounts of data from their factories, equipment and production processes to operate more ef昀椀ciently—all in alignment with the company’s Industry 4.0 vision. To do so, it recognized those companies would need to embrace digital transformation—driven by automation, edge and cloud computing. It also understood those companies use a diverse landscape of different platforms, so offering cross-platform interoperability with innovation would be important. Siemens chose to proceed with a multi-cloud, best-of-breed approach, working with multiple cloud providers to broaden the choice of platforms offered to companies, as well as investing in an advanced set of capabilities across those providers to continually optimize and improve manufacturing. Siemens chose to proceed with a multi-cloud, best-of- breed approach. Ever–ready for every opportunity 16

In depth: Siemens’ smarter manufacturing Siemens entered a strategic collaboration with By connecting the factory to the cloud, This saves both time and money, as central Amazon Web Services in 2012 and followed workers were able to view problems such as management of edge devices and apps reduces up with a series of other investments, resulting a malfunctioning machine, in real-time, and deployment and maintenance expenditures. in the development of MindSphere in 2017. make immediate improvements. By 2018, MindSphere is a cloud-based operating system Siemens made MindSphere available on Today, Siemens’ multi-cloud strategy allows it to built on native AWS technologies. It can Microsoft Azure, which enabled a bigger base offer offers a range of cloud-based solutions to process data, in real-time, from thousands or of customers to achieve quick time-to-value customers in many other industries, including even millions of devices and sensors in plants, and scale across the enterprise. healthcare and infrastructure, to bring greater systems, machinery and products dispersed ef昀椀ciency and cost savings from their machines throughout production processes and supply In 2019, Siemens announced a new and processes. chains. All this is possible due to an architecture cooperation with Google Cloud to optimize where edge and cloud computing are working factory processes and improve productivity seamlessly to deliver this business outcome. on the shop 昀氀oor. By combining Google Cloud’s data cloud and AI/machine learning MindSphere was deployed that same year at capabilities with Siemens’ Digital Industries Siemens’s own factory in Monterrey, Mexico, Factory Automation portfolio, manufacturers which manufactures more than 28 million visually inspect products or predict wear-and- circuit breakers and switches every year for the tear of machines on the assembly line. Another US market. The factory was 昀椀nding it dif昀椀cult solution from its digital enterprise portfolio, to monitor the overall ef昀椀ciency of equipment, Industrial Edge, allows manufacturers to collect including unplanned downtimes and uneven local data from IoT devices, which can be quality of production. preprocessed and sent to the cloud in small packages. Ever–ready for every opportunity 17

Carlsberg brews up future growth Tech companies aren’t the only ones accelerating and innovating through Launched in 2016, Sail the cloud, however. Danish brewer Carlsberg’s Sail ’22 project—a strategy to cut operational costs by one-third and invest those savings in future growth— ’22 prompted Carlsberg illustrates how to advance on the Continuum, with clear priorities, unwavering commitment to migration and heavy involvement of top leaders. to transition 100 percent Carlsberg was struggling to grow amid rising costs and evolving tastes. of its global process Consumers were shifting consumption from beer to wine, spirits and craft beers—or moving away from alcoholic beverages altogether. Leaders workloads to the cloud. recognized Carlsberg would need to transform into a digital business enabled by the cloud to deal with disruption and position the company for future growth. Launched in 2016, Sail ’22 prompted Carlsberg to transition 100 percent of its global process workloads to the cloud, choosing Microsoft Azure as a partner. Many organizations may not have the appetite for ambitious visions or the scale and scope of resources as Siemens and Carlsberg do. But they do set goals that can be achieved by leveraging the Continuum. Ever–ready for every opportunity 18

In depth: Cheers to Carlsberg’s better brewing business Carlsberg’s cloud–enabled innovations include: Carlsberg’s efforts are showing solid results. Major system incidents have dropped from an • A “connected bar” introduced a new, average of 13 per month to just 昀椀ve. Also, with sustainable, lighter-weight beer keg the cloud’s variable cost model, Carlsberg has out昀椀tted with IoT sensors to gauge real- been able to signi昀椀cantly reduce operating time consumption and link consumption costs. Another key advantage has been its directly with marketing campaigns—a freedom to quickly innovate and experiment. 昀椀rst for the company It is launching new initiatives and campaigns in hours, rather than months. • A “smart brewery” uses IoT sensors to identify problems during the production “With cloud, our network capacity is 10 times process and automatically issue what it was, which means our users experience maintenance requests (in development) much less latency,” says Carlsberg CIO Sarah Haywood. “The use of self-service and bots, • A service delivery transformation that which respond to natural-language questions, included setting up a new service desk, is far beyond what we had before. standardizing processes, applying intelligent tools, and optimizing team All this means our people get to focus their con昀椀gurations brainpower on those things that make a difference for our customers and consumers. And that is closing the gap between our technology and our business.” Ever–ready for every opportunity 19

IKEA makes a better way Take IKEA, a name synonymous with ready-to-assemble furniture globally. Responding to the pandemic-fueled online shopping frenzy, Barbara Martin Coppola, Chief Digital Of昀椀cer, Ikea Retail says, “Imagine having orders through ecommerce that correspond to a Black Friday every single day. We have more than double the [ecommerce] volume in a very short time.” Thankfully, IKEA had started laying the groundwork for its own digital transformation efforts several years ago, with the help of the Google Cloud team. Firmly a Continuum Competitor, IKEA was able to instantly transform their technology infrastructure, convert closed stores into ful昀椀lment centers, and enable contactless ‘Click & Collect’ services whilst increasing the capacity to manage large web traf昀椀c volumes and online orders. By using Google Cloud, among other key serverless technologies, they achieved within weeks and days things that would normally take years or months. Going forward, the company has a permanent commitment to reinvention using the cloud. “Thanks to cloud, we’re able to have a real data analytics and AI revolution. This is only possible through cloud [because it’s] just not possible, capacity and computing-wise [with on-premise]. That has been a very important evolution into starting to embed algorithms across everything we do.” says Barbara Martin Coppola, Chief Digital Of昀椀cer, Ikea Retail. Ever–ready for every opportunity 20

02 Establish cloud practices to support and augment your technologies Ever–ready for every opportunity 2121

Being agile helps you thrive and grow In a world where roughly one-third of workloads The mindset that supersedes these practices and Since its launch, are in the cloud, migrating and sitting back distinguishes Continuum Competitors from up- to enjoy the ride is not a winning strategy. and-comers is one of agility. During the pandemic, TeleConsult has For instance, it’s smart to build on cloud with agility in the cloud has helped organizations not edge, leverage PaaS services to assemble and only survive, but thrive and grow. helped several consume newer capabilities, and adopt and apply AI/ML technologies on your data and Genie Solutions solves hundred medical processes. If you don’t take those extra steps, you for telehealth simply won’t see the boost in growth, revenue professionals each and innovation that your competitors enjoy. Genie Solutions, for example, is an Australian conduct thousands The key is to couple technology adoption with software company that helps medical professionals practices that bring discipline and help you tackle the complexity of running a successful of virtual visits. change your non-technology areas at the pace of practice. Due to the sudden uptick in demand for computational improvements. As evidence, look virtual health visits, providers had to quickly come at Continuum Competitors, who temper their up with a solution. Enter TeleConsult, an end-to-end high technology adoption by following at least telehealth work昀氀ow solution for medical specialists. With much of their IT infrastructure already on AWS, four out of six practices (referenced in 昀椀gure 5). setting up the tool with Amazon Chime was a quick They adopt 25 to 80 percent more technologies process—taking less than two weeks to create the (depending on industry and region), while delivering far better outcomes. 昀椀rst iteration. Ever–ready for every opportunity 22

Research rethink at Roche Roche’s project might have Pharma has seen similar agility-driven, time-and cost-saving normally cost $150,000 and advancements that led to better outcomes—and not just in response to the pandemic. taken six months, but with Researchers at Roche used specialized NLP systems in a the reimagined cloud process, particularly novel way: To mine social media conversations it only cost $10,000 and was to better understand symptoms that impact Parkinson’s patients. It was a new approach to data sourcing and completed in just 11 days. analysis—both of which are native to the cloud—to rethink a traditional research process. This was possible because of the exponential improvements in NLP tools such as GPT-3. This technology lives and grows only on the cloud; the 昀椀eld of NLP in the past three years has seen an increase of 15,000x in parameters supported and a proportional jump in compute power. Previously, GPT-3 had been used mostly to produce press releases, technical manuals and even computer code, but had yet to be commonly integrated into business processes. Ever–ready for every opportunity 23

Starbucks serves up exceptional experiences Agility is critical to being a Continuum By 2018, 23.4 million people used the Starbucks Competitor. It is one of the six key practices app at least once every six months to make we analyzed, but also underpins the other 昀椀ve. a purchase. Because so much of Starbucks’ Embed agility into the development of new business has been cloud-ready for so many processes, and those processes will repay you years, they’re well positioned in the Continuum by allowing for ever-more agility in the future— to continue to innovate and grow, even through unleashing 昀椀nancial and human capital for economic and social uncertainties. transformation. Starbucks scores high on this kind of feed-it-forward agility and the other 昀椀ve practices detailed in 昀椀gure 5. 23.4 million people It’s no wonder that Starbucks hits high on used the Starbucks agility given the company’s progressive mindset, with a laser focus on exceptional app at least once experience and personalization. every six months. After the shock of the 2008 recession, Starbucks introduced Wi昀椀 in stores, as well as mobile payment options and loyalty programs. Ever–ready for every opportunity 24

Figure 5. Cloud Practices for Continuum Success To expand successfully on the Cloud Continuum, organizations must embrace six important practices. Continuum practices—advanced cloud Current state of practices practices that support permanent reinvention Disconnected Agility: Some parts of Feed-it-forward Agility: Speed time to future business are agile, but others are a bottleneck markets, again and again Waterfall Goals: Waterfall approach to Continuous Goals: Alignment is continuous, IT estate—big changes done infrequently not episodic Cloud-last Apps: Cloud only when Cloud-昀椀rst Apps: Cloud’s the developers’ developing new apps, but core stays legacy default Makeshift Talent Strategy: Tactical use of Talent Transformation: Compress cloud in digital transformation, 昀椀lls in gaps transformation continuously IT Conservation: Keeping the lights on, no IT Experimentation: Unremittingly upgrade new cases experiences Scale In昀氀exibility: Perpetually underutilized Scale Awareness: Predict the power or overwhelmed servers requirements for new generation of Cloud-AI Services Ever–ready for every opportunity 25

Agility-plus: How Starbucks perfectly blends practices and technology 1/ Continuous Goals 2/ Cloud-昀椀rst Apps 3/ Talent Transformation The cloud enables organizations to Customer experience can become exceptional Work looks different when cloud-based capture incremental feedback, helping with appropriate cloud-based apps. technologies can help you do your job them adapt their goals continuously to more ef昀椀ciently and effectively. achieve maximum outcome. As customer experience is the most frequently tested metric for a business like Starbucks, the Starbucks is testing NLP for heads- Starbucks uses the cloud to align its company created an AI-driven recommendation up ordering so baristas can maintain business with its growing and innovative IT platform called Deep Brew, on Microsoft eye contact with customers. AI-driven division. “As an engineering and technology Azure cloud infrastructure, that is improved espresso machines allow baristas to focus organization,” says Martin Flickinger, EVP continuously. This platform supports more on personalized crafting of the coffee. and CTO, “one of the areas we are incredibly than 100 million weekly customers, with the And predictive maintenance of espresso excited to be pursuing is using data to potential to offer in-store and drive-through machines reduces downtime and facilitates continuously improve the experience for our recommendations that can be personalized— repairs. customers and partners.” effectively turning every Starbucks menu into a smart, cloud-enabled edge device. Ever–ready for every opportunity 26

Scale Awareness is one of the practices that points most directly to the extreme nature of technology improvements on the cloud. Organizations need to learn about the limitations in compute, performance, latency and how the Cloud Continuum can solve these issues. 4/ IT Experimentation 5/ Scale Awareness 吀栀e Cloud Organizations need to be willing to Starbucks’ reach is far and growing, Continuum allows experiment with the innumerable serving 80 markets with more than services and options the cloud offers. 30,000 stores. organizations to tap Starbucks demonstrates its commitment to This sort of scale requires clear into expansive and experimentation by fostering hackathon- understanding of compute power styled app development. The goal is and its ability to accommodate next- distributed compute to churn out as many ideas as quickly generation products and services across power, which as possible. Among those ideas is varying locations with near simultaneous digital traceability from bean to cup via results. Working with Microsoft, the itself is constantly blockchain, an in-app feature for customers company updates new 昀氀avors of coffee and suppliers alike. instantaneously to edge-enabled espresso improving. machines around the world. Ever–ready for every opportunity 27

03 Accelerate innovation to deliver exceptional experiences Continuum Competitors prioritize their investments in one area: Experience. Ever–ready for every opportunity 28

Experience is everything Our research found they use a combination Almost 90 percent of Continuum Competitors of human-centered design and cloud-based in North America, for example, used the cloud technologies to rethink experience and to enhance collaboration among employees disseminate throughout the entire organization, and encouraged ambitious projects that cut including: across business functions and geographies. • Products and Services They used the cloud to make work more • Employee Experience interesting and data-driven by reducing rote • Delivery Models tasks and manual maintenance work, or used cloud-based tools to make technology To them, experience-obsessed reimagination approachable. In short, they give employees of their business is a competitive differentiator, human-centric experiences natively, which is enabled only by advancing on the aggregating them across different applications Cloud Continuum. And they make their to reduce cognitive load. investments visible and accessible to both employees and customers. ...they give In fact, these organizations go beyond the employees human- traditional notions of optimizing customer and employee touchpoints to innovate and deliver centric experiences. on exceptional experience. Ever–ready for every opportunity 29

Beautiful attractions at Sephora In tandem with customer-facing initiatives, Sephora also is redesigning in-house jobs, merging its digital and physical retail teams. Sephora can Exceptional experience is a guiding principle at beauty retailer Sephora. now look at customers from a 360-degree perspective and better use AI to Since 2015, its innovation lab has been using unique digital experiences to target the individual shoppers. attract customers. Now it employs a wide range of AI technology across its Similarly, retail giant IKEA is embracing employee care and human-centric app and in-store to make the shopping experience seamless and inviting, experiences with the cloud. The company considers caring for co-workers especially for a younger clientele. as a top priority – modifying ways of working, empowering employees with Consider this: data and digital tools, automating routine tasks, and building advanced algorithms to solve complex problems. Using the Cloud Continuum, it has • Sephora Visual Artist: A 3D live experience enables developed data models that assist co-workers, creating more ef昀椀cient customers to try on product virtually via Sephora’s app transportation routes, which in turn enrich customer experience. and in-store. Sephora partnered with AI and AR app provider ModiFace to launch both its mobile app and in-store 3D augmented-reality mirror. • Color IQ: A device scans the surface of your skin and assigns it a Color IQ number, which reveals scienti昀椀cally precise foundation matches—an inclusive design for traditionally under-represented skin tones. Sephora is committed to stocking 15 percent of its products from Black- owned businesses, which helps the company stock a wider range of foundations and other cosmetics, and delivers a personalized user experience to diverse customers. Ever–ready for every opportunity 30

Samsung elevates customer Meanwhile, at Samsung Research, experts are It is deploying augmented reality so customers experiences exploring AI to make customer interactions can use their phones to get the behind-the- with devices and appliances hassle-free and scenes story of the coffee, from sourcing to Customers are also the focal point at Samsung, natural. It’s what the company calls “multimodal roasting to how their cup is brewed right in front the South Korean electronics behemoth. Take interactions,” where devices and appliances can of them. Samsung NEXT Ventures, the investment offer multiple modes of interaction, including arm of Samsung NEXT—an innovation group speech, sight and touch. For a customer, this On the business side, the company regularly within Samsung dedicated to identifying new could mean giving sign-language directions to conducts cohort-based learning journeys on the growth opportunities. It is looking to provide vacuum cleaners or voice commands to turn cloud, where 20 to 30 partners come together an exceptional customer experience by on or off air-conditioners. Today, AI systems use and focus not on learning esoteric technologies, getting close to where customers are—with deep learning to achieve this type of elevated but on building hackathon-style applications. edge computing. As such, it is developing user experience. This illustrates how cloud capabilities are innovative approaches to offset the lower enabling a new kind of creative freedom for compute power and lower data processing Getting creative with coffee organizations willing to invest. capabilities of edge devices. Imagine a future in which every device in your vicinity draws on Then there’s Starbucks again. On the customer- Mini clouds of edge devices the resources of every other device around you facing side, the company is trying to 昀椀gure to form a system stronger than the sum of its out how their baristas can better serve regular combine the best of both parts—an ecosystem of connected doorbells, patrons. Achieving that kind of personalization smart speakers and TVs, all within the same at a global scale can be daunting. worlds—the low-latency neighborhood. The resulting mini clouds— formed of edge devices owned by multiple The company is approaching the challenge by benefits of computing on people or even companies—could combine the using cloud-based analytics on the edge to let low-latency bene昀椀ts of computing on the edge, customers opt-in to personalized drive-through the edge, with the brute with some of the brute computing power of the menus that feature their regular brews as well as computing power of the cloud. cloud, bringing us the best of both worlds. recommendations based on past purchases. Ever–ready for every opportunity 31

Mixing it up at Munters Munters is another organization that illustrates how an organization can use the Continuum to reimagine and reinvent the employee experience. The maker of energy-ef昀椀cient air treatment and cooling systems for industrial and agricultural applications found onsite client visits were dif昀椀cult during the pandemic. So, they enabled engineers to use mixed reality, powered by Vuzix Smart Glasses, to collaborate remotely with clients via real-time video, images, gestures, real objects and more. These glasses could be plugged into their enterprise resource planning (ERP) and asset management systems by technology partner IFS Cloud, powered by Azure. Today, this experience is used by more than 200 of Munters’ engineers worldwide. Forced by the pandemic to provide their customers unique experiences and serve them in new—virtual—ways, some companies compressed their digital transformation during the pandemic and Leapfrogged to higher performance level. To learn more, read about the Leapfroggers here. Ever–ready for every opportunity 32

04 Provide continuous strategic commitment Today’s cloud offers the chance to move from a scarcity mentality—where simply cutting costs is the goal— to a mindset of abundance where experimentation, innovation and growth can flourish. Ever–ready for every opportunity 33

Build your own reality Put your customized business plan into action with the Cloud Continuum With abundance comes opportunity, a sense But organizations also must recognize the BHI brings proactivity of limitlessness and true blue-sky thinking. But “all-hands” nature of the challenge—everyone to the table abundance can also lead to paralysis—too many across the organization needs to be aware choices and concern for how to integrate them of the cloud’s potential and best practices. At BHI, a construction company, the transition into existing and future goals. Therefore, it’s Innovation can come from anywhere, and to Google Cloud has transformed the company critical that leaders understand how to balance when more people with varying perspectives culture. In essence, BHI’s employees trust their own Continuum ambitions with strategic and skillsets are invited into the conversation, Google Cloud (and AppSheet) so much that priorities that will keep the business focused. more possibilities abound. they’re constantly asking, “What else can I do?” Speci昀椀cally, leadership needs to establish To that end, we see that leadership is They have been empowered by this digital business objectives, appropriate levels of responsible for not only setting ambitious yet transformation and are constantly trying to 昀椀nd risk-taking, and evangelize a culture for agility attainable goals and touting an exciting vision, innovative solutions using the technologies at and growth. This is easy enough to say, but in but also organization-wide education and hand. According to their Director of IT, “In just practice, there can be complexities around evangelism. three years of using these technologies, IT has budgeting mentality, how business interacts gone from being support overhead to being with IT, risks and incentives, how success is Leadership should intentionally go through the proactively brought to the table to take part in measured and the project-versus-product enterprise and ask, “What awareness are we the business strategy.” mindset. This is why the call to action needs to building?” “How well do employees at all levels come from the top—and with as much clarity understand the goals and the potential of the and focus as possible. Cloud Continuum?” Ever–ready for every opportunity 34

BHI isn’t alone in putting technology at the center of its strategy. Across 3M scales up to double down industries we see that every company is becoming a technology company. This is possible because of the democratization of technology that has Similarly, at 3M, Michael G. Vale, EVP of the company’s Safety & Industrial accelerated in recent years—empowering every business to build their Business Group, talks about “a very strong mentality of empowerment in realities with tech. Explore more in Tech Vision 2021. the organization—shared goals, shared directions, shared framework and Increased IT visibility and accountability has helped solve business guardrails, all empowering people to act as they see 昀椀t. With that combination of alignment and empowerment, things happen a lot more quickly and more problems and led to increased pro昀椀tability. powerfully than before.” AppSheet is simple to use and produces quick results. As AppSheet is a 3M started its cloud journey in 2016, selecting AWS as a partner. It started with no-code platform, and it’s easier to learn how to build and maintain apps several important applications, gradually moving more to the cloud. Then the on it than with traditional platforms. In less than two years, BHI has built COVID-19 pandemic struck. As hospitals across the country were in desperate and deployed more than 115 AppSheet applications. This self-suf昀椀ciency need of protective gear to prevent healthcare workers from contracting the with in-house, no-code app development has enabled BHI to reduce its virus, 3M saw unprecedented demand for its respirators and PPE. How was it dependence on third-party software products and freed up 10 percent of able to scale up? current IT spend. In less than two years, BHI has built and deployed more than 115 AppSheet applications. Ever–ready for every opportunity 35

“Agility is, to use the Midwestern phrase, the The company decided to process and analyze hockey player that is charging across the center big data locally—at the edge, using Microsoft who suddenly 昀氀ips onto the back of his skates Azure SQL Edge. The goal was to push data and is going backwards in a different direction, from the plant’s on-premises SQL Server 昀氀awlessly, without losing a beat,” says Vale. to Azure SQL Edge, enable downstream applications to use the data stored in the SQL “That sense of agility, changing direction in your Edge device and then upload it to the cloud for rotation at speed without missing a beat, is further use. what we’re trying to get to. As with all changes it takes a while to do it—you have to get used With this new edge capability deployed, the to operating in a new rhythm. But I think we’re resulting faster and more streamlined processes getting there.” allowed 3M to predict a manufacturing line’s problems in advance, thus providing both By the end of the 2020, the company had operational ef昀椀ciency, cost savings bene昀椀ts and doubled its global production of N95 respirators solving a novel manufacturing problem with a to more than 1.1 billion per year. Supply-chain novel approach. ef昀椀ciencies and integrated business planning helped, but a critical enabler was 3M practices on the Cloud Continuum. For instance, at one 3M had doubled its of 3M’s manufacturing plants, it was dif昀椀cult to gather, transfer and use the data from the global production of production systems. N95 respirators to more than 1.1 billion per year. Ever–ready for every opportunity 36

Reinventing on the Continuum Migration of core systems and data is the foundation of a successful cloud journey—but it’s just table stakes. From there, organizations must ask themselves how they can use the cloud to position themselves for sustained growth in the next three to five years. That’s why we follow the Continuum Competitors and their progress so closely. The more we research their advancements, the better we’re able to chart a course for every organization looking to advance on the Cloud Continuum. Ever–ready for every opportunity 37

Plug into future potential Be ready for every opportunity that comes your way with the Cloud Continuum Continuum Competitors are ahead of the pack. 吀栀ey’re Similarly, retailers are using Alibaba Cloud’s e-commerce building smart factories, e昀케cient and resilient supply chains, solutions leveraging intelligent chatbots, livestreaming, and sustainable products and thriving organizations using cloud- personalized content recommendation. based technologies such as AI/ML, private cloud, edge, 5G and PaaS, among others. And they are 昀椀nding new ways to shape All of this allows these organizations to meet and surpass the transformation of their industries by leveraging cloud-based customer expectations, retain top talent and give back to the solutions to solve industry-speci昀椀c problems. planet as well as their investors. For example, life sciences companies are using solutions such as 吀栀is kind of success isn’t guaranteed or industry speci昀椀c. Microso昀琀 Genomics for genome sequencing, Google DeepMind Achieving similar gains requires 昀椀rst understanding the power of to accelerate protein folding and drug discovery, and AWS the Cloud Continuum and what it can do for your organization. HealthLake for storing and analyzing healthcare data using Equally important, your leadership must adopt and infuse a NLP, AI models, visualizations and predictive insights. 吀栀ey’re cloud-昀椀rst culture throughout the organization. also using end-to-end systems such as AWS Monitron that use machine learning to detect abnormal behavior in industrial Change hearts, change minds, change the way you work—and machinery. unlocking the full potential of your enterprise in the cloud will result in substantial, sustained payo昀昀s. Ever–ready for every opportunity 38

About the research We employed a multi-method research approach. Speci昀椀cally, the research program included surveys, interviews and case study research, and economic modelling. Our research, and that of our partners in our ecosystem, employs ethical and responsible research methods. Respondents reveal their identities voluntarily, we anonymize all data from organizations in our data set, and report results in aggregate. We commit to not using the data collected to personally identify the respondents and/or contact the respondents. Organization size $10B - $14.9B 3,863 executives, global $15B - $19.9B 11% $5B - $9.9B 50% of respondents with IT role $20B - $24.9B 4% 22% % Over $25B 3 50% of respondents with non-IT role 4% C-level only Organization % size Below $500M 15 17% Our dataset contains a range of organizations $2B - $4.9B from very high-growth (16% +) to those witnessing 24% declining revenue and margins, and many in between. $500M - $1.9B Average margin growth: -0.14% Average employee growth: 1.38% 16 Industries 25 Countries Financial Services Resources Products Argentina (67) India (100) Saudi Arabia (37) Banking (357) Utilities (295) Retail (100) Australia (100) Indonesia (50) Singapore (50) Insurance (252) Energy (Oil and Gas included) (95) Consumer Goods and Services (356) Brazil (67) Ireland (51) Spain (201) Chemicals (188) Travel (299) Canada (200) Italy (201) Thailand (50) Communications, Media Metals and Mining (182) Industrial Equipment (334) Chile (66) Japan (200) United Arab Emirates (38) & Technology Life Sciences (277) China (200) Malaysia (50) United Kingdom (200) High Tech (193) Health & Public Services Automotive (178) Colombia (25) Mexico (50) United States (1260) Software and Platforms (326) Health (288) France (200) New Zealamd (100) Public Services (143) Germany (200) Nordics (100) Ever–ready for every opportunity 39

1) Survey De昀椀nition of Continuum Competitors and 2) Interviews and Multiple Case Studies The Accenture survey, completed between late Migration Players: We triangulate our 昀椀ndings from the large-scale 2020 and early 2021, collected data on: a) adoption We create an index score comprising two key primary data from the survey with multiple case and scaling of technologies associated with cloud, elements of an organization’s cloud journey: a) studies. Overall, we collected through secondary b) the organization’s cloud journey, strategy, and adoption of technologies on the continuum and b) research and interviews about 18 case studies goals, c) management practices around cloud, embracing of practices that position organizations focusing on issues organizations are facing on their d) multiple measures of 昀椀nancial and operational to take advantage of these technologies. cloud journey and the evolution of organizations performance, and e) the impact of cloud on Organizations in the top 30 percent of technology toward the Cloud Continuum. innovation and sustainability outcomes. adoption and in the top 30 percent of adoption of practices were considered to be those on 3) Economic Modelling The graphic above summarizes the survey the continuum. Organizations in the bottom 50 To look at how performance outcomes have demographics. percent of technology adoption and in the bottom changed for Continuum Competitors compared to 50 percent of practices were considered to be migration players in our sample, we estimated the Inference Approach migration players. following equation for each of the performance First, we de昀椀ne and group organizations into those Calculation of the Performance Difference outcomes for each region separately: who are on the Cloud Continuum and those who view cloud with a migration perspective. That is, we Using the de昀椀nitions above, we compare the Performance〗_i=∑_(j=1)^3 β_(1,j) 〖Category〗_ij+〖 ∑_(k=1)^n β〗_k X_(i,k)+ε_i identify organizations that are leading in terms of difference in performance between Continuum both technology adoption in the Cloud Continuum Competitors and migration players—with where i is the index for organizations and j is the and in evolving practices and behaviors to use metrics such as cost savings, revenue growth, index for categories. Category represents whether these technologies to their advantage. We then and innovation of supply chain/warehouse and an organization is identi昀椀ed as a continuum investigate if being on the Cloud Continuum is how knowledge work is performed within the competitor, a migration player, or is somewhere in correlated to measures of performance. organization. We also compare organizations between the two. Xk is the vector of 昀椀rm-speci昀椀c in terms of their ambitions and the number of controls such as size, industry and country. operational and sustainability goals they target to achieve. Performance is measured as revenue growth, cost savings, number of operational goals and number of sustainability goals that organizations target. Ever–ready for every opportunity 40

25 technologies enabled by the Cloud Continuum Cloud AI and Automation • Cloud SaaS/Software as a service (i.e. Salesforce Sales Cloud, Workday) • Deep Learning • Cloud IaaS/Infrastructure as a service (i.e. Amazon Web Services EC2, Azure IaaS) • Physical Robots • Cloud PaaS/Platform as a service (Amazon Web Services Elastic Beanstalk, Force. • Vision Systems com, Heroku) • Natural Language Systems • Hybrid Cloud (mixed computing, storage, and services environment made up of • Tiny ML on-premises infrastructure, private cloud services, and a public cloud, i.e. Microsoft • Federated Learning • Azure Arc, Amazon Web Services Outpost) • RPA (Robotic Process Automation) • Serverless Computing (i.e. Amazon Web Services Lambda, Microsoft Azure Functions) Internet of Things • Cloud Native Applications – custom (runs in cloud end-to-end, i.e. written, tested, • Internet of Things (IOT) and deployed in the cloud, using technologies and services that are cloud-based • Edge/Fog Computing and not just rehosted) • Containers (i.e. Running on Docker, Microsoft containers) Security • Microservice Architectures (arranges an application as a collection of loosely • Cyber Threat Intelligence (CTI)/Active Defense: Systems that anticipate, detect, coupled services) analyze and respond to external threats such as malware, hacks, sovereign threats, etc. • Multi-cloud (use of multiple cloud computing and storage services in a single • Endpoint Detection and Response: Systems that monitor endpoints to detect heterogeneous architecture) threats to network and devices Real-time Data Capture and Analysis • SIEM (Security Information and Event Management): Capabilities that allow for • Data Lakes (data repository) 昀椀rms to collect logs from throughout the network, normalize that data, and analyze • Streaming/real-time data it for security events • Big data analytics • Trust-based Architectures: Architectures that allow for privacy-protecting ML models such as federated ML, tiny ML, secure multi-party computation, differential privacy, encrypted computation and others to happen at the edge Ever–ready for every opportunity 41

About the authors Karthik Narain H. James Wilson @KarthikSNarain @hjameswilson Karthik Narain leads Accenture Cloud First, with H. James Wilson is global managing director of IT and responsibility for helping clients shape, move and Business Research at Accenture Research, where operate their business in the cloud to accelerate he leads global research programs on the impact of innovation and achieve their digital transformation technology on enterprises and work. Wilson is co-author goals. In his role leading Accenture Cloud First, Karthik of the bestselling book “Human + Machine: Reimagining is focused on extending the company’s leadership in Work in the Age of AI” (Harvard Business Review Press). cloud with Accenture’s ecosystem partners and through He is author or contributing author of eight books on investments in deep industry capabilities and solutions, the impact of technology on work and society, including cloud acquisitions, and talent. He is also a member of the most recently, “AI, Analytics, & The New Machine Age” company’s Global Management Committee. (HBR Press 2019) and “How to Go Digital” (MIT Press 2019). Wilson wrote “The Jobs Arti昀椀cial Intelligence Will A technology industry veteran, Karthik most recently Create,” MIT Sloan Management Review’s #1 Most-Read served as the lead for Accenture Technology in North article of the year and is a longtime contributor to The America, helping guide Global 2000 brands in using Wall Street Journal and HBR. He is currently 昀椀nalizing a the power of the cloud and other technologies to new book on the future of enterprise technology with transform their businesses. Over his 20-year career, he Paul Daugherty (HBR Press). has led many innovative technology programs for clients across a variety of industry sectors, including Financial Services, High Tech and Software and Platforms. Karthik also previously led Technology services for Accenture’s Communications, Media and High-Tech industry segments. Ever–ready for every opportunity 42

Acknowledgments Research Lead Surya Mukherjee Project Team Douglas Chandler Gargi Chakrabarti Jakub Wiatrak Katherine Greene Krish Jhaveri Maria Francesca Mecca Mark Klinge Melina Viglino Prashant Shukla, PhD Shital Sharma Thijs Deblaere Ever–ready for every opportunity 43

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CRM%2C%20and%20predictive%20maintenance 3M eyes digital transformation with C3 IoT, May 17, 2020. https:// www.supplychaindigital.com/supply-chain-2/3m-eyes-digital- transformation-c3-iot In the News: With machine learning, manufacturing giant 3M innovates products old and new, November 21, 2019. https:// aws.amazon.com/blogs/industries/in-the-news-with-machine- learning-manufacturing-giant-3m-innovates-products-old-and- new/ 3M Health Information Systems Case Study, Amazon Web Services, 2016. https://aws.amazon.com/solutions/case- studies/3M-health-information-systems/ 3M explores new label-as-a-service concept with blockchain on Azure to stop counterfeit pharmaceuticals, April 5, 2018. https:// customers.microsoft.com/fr-fr/story/blockchain-3m Interview: 3M’s Road to IoT, June 19 2017. https://www.iotcentral. io/blog/3m-blog Open Source at re:Invent 2017, November 22, 2017. https://aws. amazon.com/blogs/opensource/open-source-at-reinvent-2017/ IKEA Ikea on how Google Cloud has helped it cope with COVID- induced shifts in customer demand, 27 Oct 2020. https://www. computerweekly.com/news/252491151/Ikea-on-how-Google- Cloud-has-helped-it-cope-with-Covid-induced-shifts-in- customer-demand Ever–ready for every opportunity 46

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