$414 Billion in Profits can be Gained by Using Cloud for Business Growth: Infosys Research
- Improving speed to market and the ability to discover new revenue streams through cloud can increase profit growth by up to 11.2 percent YoY
- But to realize these financial gains, at least 60 percent of systems need to be in the cloud
BENGALURU, India, May 25, 2021 /PRNewswire/ -- Infosys (NYSE: INFY), a global leader in next-generation digital services and consulting, today unveiled the Infosys Cloud Radar 2021 which has revealed the links between enterprise cloud usage and business growth. The independent study shows that enterprises in the 6 regions surveyed can add up to $414 billion in net new profits, annually, through effective cloud adoption.
The Cloud Radar 2021 survey was conducted by the Infosys Knowledge Institute (IKI), a research arm of Infosys, with over 2,500 respondents from companies across U.S., U.K., France, Germany, Australia, and New Zealand. It covered a range of business performance goals related to cloud and found specific links to competencies such as speed to market and capabilities. A strong profit link was identified when using cloud to rapidly bring new solutions and services to market. These investments provide a foundation to leverage AI & automation and build cloud based new sources of revenue.
The study found specific links between business profit growth and the use of cloud to rapidly develop and launch new solutions and bring new functionality to market. Cloud's ability to generate new value from data and discover new revenue sources also links to profit growth.
Specifically, these benefits are derived from business' ability to accelerate time to market, enhance business capabilities and build a competitive edge. The study found that the highest performing businesses had annual profits growth that correlated with using cloud in six ways.
- Speed up how they develop and launch new solutions
- Add new functions to software in use
- Expand processing capacity
- Foster collaboration
- Unlock value from data via AI
- Discover new revenue sources.
Superior Cloud performance requires high levels of adoption and orchestration
Cloud-fueled profit boosts can be attained by companies in any region or industry. However, they only kick in when businesses have at least 60 percent of their systems in the cloud. To benefit from AI on cloud, the bar is even higher. Businesses must have at least 80 percent of their business functions – such as cross domain business applications – in the cloud for AI to boost profit growth.
Our research describes four distinct performance cohorts – minimally effective, effective, highly effective, and exceptional. Businesses can benchmark themselves against each cohort by exploring the cloud radar digital experience and learn how to improve their cloud strategy and performance.
- Exceptional performers (16 percent) use a larger mix of cloud service providers and more frequently employ hybrid cloud arrangements.
- Highly effective performers (19 percent) have shifted nearly as many business functions to the cloud as exceptional performers. They are motivated to use cloud for accelerating deployment of new solutions and services.
- Effective performers (33 percent) have rapidly shifted business functions to cloud but started with fewer business functions in cloud two years ago. This cohort is more focused on cloud for cost savings than better-performing peers.
- Minimally effective performers (32 percent) are least likely to use public cloud and have the least certainty in estimating cloud expenditures.
Despite acceleration in cloud adoption, only a fraction of large companies reached the highest level of performance and adoption. The Cloud Radar study found that nearly 1 out of 6 companies achieved exceptional cloud performance. In cloud adoption terms, fewer than one in five have crossed the 60 percent threshold to reap the profit benefits. By 2022, more than 40 percent of enterprises surveyed plan to shift over 60 percent of systems into the cloud, from 17 percent today.
Companies delivering exceptional performance in the cloud show a strong motivation to use cloud for business growth, namely, increasing speed to market, adding capabilities, and increasing scale. These exceptional performers also demonstrated greater confidence in terms of cloud spending and were more likely to engage with three or more cloud service providers, giving them the capability to place workloads optimally. They also more frequently utilize a hybrid multi-cloud arrangement – combining the best features of private and public cloud.
Ravi Kumar S., President, Infosys said, "Effectively leveraging cloud is a transformational pillar in digital journeys. Where early cloud ,was a tool for allowing companies to rapidly scale, modern cloud allows companies to rapidly innovate. Today's cloud creates a network effect across processes, data, content, experience and more. This network effect keeps enterprises relevant in a rapidly changing new digital age. The findings from the Infosys Cloud Radar 2021 comprehensively show that growth and profitability can be correlated to superior enterprise cloud adoption and orchestration."
Explore the Infosys Cloud Radar 2021 Digital Experience here
To know more about Infosys Cloud Radar 2021, please visit our website here
View a short video on the Infosys Cloud Radar 2021 study here
Methodology
Infosys commissioned independent market research company Feedback Business Consulting to undertake a study to understand:
- Enterprise progress to the cloud
- Performance of business tasks in the cloud
- Motivations, goals, and concerns in the cloud
- Revenue and profit growth levels
A total of 2,500+ business executives were surveyed across the US, UK, France, Germany, Australia, and New Zealand. The respondents were senior executives representing both technology and business functions.
Based on their enterprise performance, progress and profitability, Infosys Knowledge Institute was able to distil performance competencies that are shared by companies with higher levels of profit growth. Other competencies, such as scale, security and resilience did not show direct or indirect links to year-over-year profit growth.
Find out more by visiting the Infosys Cloud Radar 2021 digital experience. For more information on how Infosys Cobalt is helping leading global companies improve speed to market and enable new revenue streams, please visit: www.infosys.com/cobalt
About Infosys Ltd.
Infosys is a global leader in next-generation digital services and consulting. We enable clients in 46 countries to navigate their digital transformation. With four decades of experience in managing the systems and workings of global enterprises, we expertly steer our clients through their digital journey. We do it by enabling the enterprise with an AI-powered core that helps prioritize the execution of change. We also empower the business with agile digital at scale to deliver unprecedented levels of performance and customer delight. Our always-on learning agenda drives their continuous improvement through building and transferring digital skills, expertise, and ideas from our innovation ecosystem.
Visit www.infosys.com to see how Infosys (NYSE: INFY) can help your enterprise navigate your next.
Safe Harbor
Certain statements in this release concerning our future growth prospects, financial expectations and plans for navigating the COVID-19 impact on our employees, clients and stakeholders are forward-looking statements intended to qualify for the 'safe harbor' under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding COVID-19 and the effects of government and other measures seeking to contain its spread, risks related to an economic downturn or recession in India, the United States and other countries around the world, changes in political, business, and economic conditions, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, intense competition in IT services including those factors which may affect our cost advantage, wage increases in India, our ability to attract and retain highly skilled professionals, time and cost overruns on fixed-price, fixed-time frame contracts, client concentration, restrictions on immigration, industry segment concentration, our ability to manage our international operations, reduced demand for technology in our key focus areas, disruptions in telecommunication networks or system failures, our ability to successfully complete and integrate potential acquisitions, liability for damages on our service contracts, the success of the companies in which Infosys has made strategic investments, withdrawal or expiration of governmental fiscal incentives, political instability and regional conflicts, legal restrictions on raising capital or acquiring companies outside India, unauthorized use of our intellectual property and general economic conditions affecting our industry and the outcome of pending litigation and government investigation. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings including our Annual Report on Form 20-F for the fiscal year ended March 31, 2020. These filings are available at www.sec.gov. Infosys may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
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