Research shows that although Cloud technology is maturing substantially, the business potential is yet to be realized by most organizations (Berman et al., 2012). Especially in the context of innovation, companies are often not aware of the opportunities that Cloud inherits. For this reason, Weolcan has taken the initiative to collaborate with the Rotterdam School of Management on a research project aimed at identifying how Cloud drives innovation and to what extent the ‘digital intelligence’ of an organization plays a role. In this blog, we're happy to share the main findings of this research with you.
Cloud is increasingly adopted throughout the business
Cloud is increasingly adopted throughout the business, whereby the IT department as well as R&D still hold substantial responsibility for technology adoption. However, business departments are on the rise, showing that IT is no longer solely responsible for leading technological advancement. Even employees themselves are starting to build applications on low-code development environments, often referred to as 'citizen development'. So, as Cloud is increasingly adopted and leveraged throughout organizations, the next question is: how are companies taking advantage of technology in pursuit of innovation?
Figure: respondents were asked to indicate what parts of the organization are involved in adopting cloud technology. Multiple answers were possible. For example, 94% of the respondents has indicated that the IT Department is involved in adopting cloud technology.
Cloud as a means to facilitate innovation goals
Our research shows that technology is increasingly playing a fundamental role in innovation initiatives. Cloud is especially leveraged to:
- develop new value-added offerings (54%) and;
- to enhance the quality of offerings (46%)
Figure: Respondents were asked to indicate what innovation goals can be facilitated with the help of cloud technology. Multiple answers were allowed. For example, 54% of the respondents has indicated that in their organization, cloud technology is used for new, value added offerings.
Digital Intelligence as a catalyst for leveraging Cloud technology for innovation
Digital Intelligence is a scoring mechanism that assesses a company’s digital affinity and capabilities and was introduced by Bughin et al. (2017). This research concludes that companies with a high level of Digital Intelligence
are able to gain higher financial returns, and fight the pressure of disruption. In line with this, our research shows that companies with a high level of Digital Intelligence can exploit advantages of Cloud more than companies with a low level of Digital Intelligence today. However, both, companies with a high and low level of Digital Intelligence have equal ambitions with regard to exploiting Cloud advantages in the future. This indicates a clear desire to exploit Cloud advantages more, but only companies with a high level of Digital Intelligence have the means to truly capitalize on this objective.
Figure: conceptual model displaying the link between cloud technology and innovation and the role of digital intelligence.
Three important managerial takeaways
- Cloud is increasingly adopted and its application ranges from IT to business departments.
- Cloud is increasingly associated with the realization of innovation objectives, but the true potential is yet
to be realized.
- The differentiator for moving to the Cloud or exploiting its advantages is Digital Intelligence.
Want to read more?
Download our whitepaper on 'How Companies in The Netherlands use Cloud for Innovation'
Bughin, J., Catlin, T., Hall, B. and van Zeebroek, N. (2017). Improving your digital intelligence. MIT Sloan
Ottmann, J. (2018). How does Cloud technology enable innovation and what role does digital intelligence play?
Master Thesis. Rotterdam School of Management.
Pisano, G. P. (2015). You need an innovation strategy. Harvard Business Review, 93(6), 44-54