A key takeaway from PwC’s 28th Global CEO Survey — Canadian insights is that the business reinvention imperative is real, highlighting the urgency for organizations to strategize beyond “business-as-usual”.
Canadian CEOs recognize the need to embrace new technologies, invest in new sectors and reinvent their businesses. At least 60% of Canadian CEOs who responded to the same survey suggested that they have taken at least one significant reinvention action for their business in the past year.
According to PwC’s 2024 Cloud and AI Business Survey, data modernization is a key factor in driving the adoption of Generative AI across businesses. The survey indicates that 69% of top-performing companies have implemented data modernization to leverage their Generative AI transformation efforts.
Cloud is a foundational capability for business re-invention that enables organizations to effectively enhance their operational efficiency, achieve greater flexibility and innovate at speed. This transformation paves the way for innovative solutions, such as data analytics and artificial intelligence, to be seamlessly integrated into core business strategies. As a result, companies can unlock new revenue streams, improve customer experiences and maintain a competitive edge in an increasingly digital world.
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Beyond migration: What’s the value of cloud modernization?
Over the past few years, business leaders’ focus has shifted to the true value of cloud — improving efficiency, empowering employees and reimagining the customer experience.
This is why it’s essential for organizations to start thinking about their cloud journeys differently, and modernization should be a significant part of their migration strategy. The “lift-and-shift” approach of simply transferring software and data to the cloud may be fast and minimally disruptive — but it leads to many missed innovation opportunities, as traditional applications are not built to generate maximum value from the cloud.
In simplistic terms, modernization goes far beyond solely moving applications to the cloud. It actually requires identifying how technology can solve a set of business problems in new ways.
As companies are looking for ways to rethink their business models, through modernization, businesses can generate additional value and expedite their transformation by understanding the various types of modernization:
Redesigning business processes and embedding Agentic AI capabilities while migrating from a legacy ERP platform to a modern SaaS version.
Re-imagining and rebuilding outdated manual workflows into automated, AI-enabled processes by using Microsoft Power Platform.
Re-thinking an organization's data strategy by moving disparate data warehouses to a cloud-based data mesh architecture on Azure Fabric and enabling real time analytics.
Transitioning from on-prem frontend apps to more intelligent, scalable, cloud-native solutions on Azure.
In each case, applications are architected to be operationalized in the cloud — but at the same time, they’re architected to enable true modernization of business capabilities. This way, organizations can leverage the expanded features and functionalities cloud computing offers, and receive the desired business benefits. Some of these benefits include:
Automating routine processes so employees can focus on higher-value tasks;
Increased personalization for customers based on an organization’s ability to use AI to analyze large amounts of data;
Enhancing security for customers by identifying and addressing potential fraudulent activities;
Accelerate the pace of innovation, so new features and services can be rolled out more efficiently.
An effective cloud modernization strategy should set the stage for data- and AI-driven innovation, with the ability to respond to changing market demands at speed.
Key challenges in cloud modernization
When cloud migration and modernization efforts underdeliver on strategic objectives, it’s often because legacy application and integration architecture is difficult to untangle, or adapting these systems to agile, scalable cloud platforms is more complex than anticipated.
There may also be instances where there’s limited documentation or knowledge about how these legacy systems work; organizations commonly lack complete inventories of in production code, dependencies, configurations, workloads and integrations essential for cloud modernization.
Security and compliance work very differently in cloud. On their cloud modernization journey, organizations must adopt a new zero trust security model, which can have cost and change management implications. In addition, compliance with industry regulations (especially in heavily regulated businesses) will also require an update.
A cloud modernization program is not just a technology challenge — it requires changes in an organization's operating model as well. Organizations will have to invest in building new capabilities and developing new skills that can support this new operating model. Scaled adoption of Agile, DevSecOps and Infrastructure as Code (IAC) concepts will become critical for longer term sustainment. New capabilities like FinOps will have to be developed to ensure that cloud costs don’t spiral out of control.
Access to capital is another common challenge for today’s organizations, and effective modernization can be a substantial upfront investment — so while leaders want to prepare their organizations for the future, they also need to tackle the immediate demands of the business and its customers. Properly defining value drivers, navigating technical complexities and implementing change management best practices are key to navigating these hurdles.
Unlocking business value in the cloud
To be successful on a journey as complex as cloud modernization, leaders must remember that failing to plan is planning to fail, and an intentional strategy is required. Organizations need to have an ambitious vision but a practical approach, with well-defined paths that involve the right testing, tweaking and validating along the way.
While early wins are important at times, organizations may need to go slow in order to go fast. Incremental delivery and measurable wins should be realized through a step-by-step, phased approach that fits with a long-term vision and avoids any oversights that can be made when adequate controls are lacking. Building a strong cloud foundation with the right automation and IAC capabilities is critical. This allows businesses to migrate and modernize fast, while also reducing future operational overhead and addressing pressing technical debt issues.
Finally, organizations must develop FinOps capabilities to monitor and optimize their cloud expenditure as they transition to Azure. With a structured RACI framework for their cloud journey, they would be able to maintain operational continuity and minimize financial risk, reducing cloud spending while improving service delivery.
When it comes to successful migration and modernization, business leaders must ensure that their tools, technologies, processes and people are all advancing in tandem — which is where PwC’s Microsoft Alliance can provide significant value by defining the path to success.
The value of PwC Canada’s Microsoft Alliance
Traditional business models and the competitive landscape have been disrupted by new technologies, — Canadian organizations must effectively leverage their data to stay relevant.
We’re uniquely situated to help organizations rise to the challenge. Our Microsoft Alliance delivers deep expertise in cloud strategy, Cloud infrastructure, engineering and security, as well as extensive knowledge of various Microsoft services and offerings platform for your overall ecosystem. It also builds targeted, industry-specific solutions and use cases, while doing pioneering work in the generative AI and Agentic AI space to drive business value for clients.
For example, our practice has developed cloud migration and modernization playbooks that accelerate all aspects of an organization’s cloud migration. Some examples include:
Pre-built application and infrastructure assessment tools that work in conjunction with Microsoft products to expedite development of migration and modernization strategies, business cases and roadmaps.
Azure-specific libraries of infrastructure as code (IAC) templates that can help you deploy automated and secure Azure Landing Zones at speed.
Gen AI and agentic AI solutions that can help organizations re-interpret their legacy applications and achieve significant efficiencies in their software development lifecycle (SDLC) by leveraging these capabilities.
FinOps tools that allow organizations to manage and optimize Azure costs while driving business value.
A repository of pre-defined cloud roles and RACI (responsible, accountable, consulted and informed) practices to help organizations support the cloud environment along with training and upskilling their people.
Canadian organizations need to implement a multi-phase plan to stay the course and a multi-horizon outlook to get ahead. PwC Canada’s Microsoft Alliance provides powerful new opportunities to realize the combined benefits of cloud modernization and AI adoption, all while delivering industry-leading advisory alongside our managed services team that support scalability and growth.
This includes helping organizations adopt the Microsoft 365 Copilot expansion, enhancing operational efficiency by deploying AI agents to independently perform tasks, assisting businesses implement and scale AI solutions through AI Foundry, and more.
Begin your Gen AI and cloud modernization journey with PwC Canada’s Microsoft Alliance
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