The cloud is no longer a new thing. It’s already a part of many people’s lives whether they realize it or not. If you’re reading this, then your organization probably isn’t there yet in any substantial way.
Maybe nothing is yet cloud-based, but more likely your situation is like many other organizations; there is some “dabbling” in the cloud with a couple of small self-contained applications like a specialized HR or sales app. But even with a few cloud-based apps your organization may not be truly embracing the cloud and realizing its full potential.
In a previous post I briefly described how organizations should be approaching big data, analytics and the cloud in the context of a larger digital strategy. In this article we’ll drill further into the cloud and its place in a larger strategy.
How to maximize cloud benefits, by making it part of a digital transformation strategy
Why should cloud be part of a larger business or organization strategy?
Cloud technology has tremendous potential from a business perspective, but the challenge is to determine what that looks like for your organization.
First and foremost, I urge you to take an incremental approach in your move to the cloud. Moving completely from one house to another in a weekend is achievable with some solid preparation and enough help. This is absolutely not the approach to take when thinking about moving to the cloud. It should be viewed as a journey with a solid understanding of where you are intending to go, stops along the way and the flexibility to modify plans and make detours when necessary. This doesn’t imply slow. It can be a fast journey, but it still should truly be a journey. There are many reasons for this.
Shifting to the cloud has many impacts from both technical and business side. It’s things like security, support, funding and governance. The more core the system, the higher these impacts are. These are all significant challenges to overcome but they have to be resolved properly or you risk diminishing all the benefits that should be realized.
Your journey should start and end with a sound business case that meshes with that higher-level digital transformation strategy that I describe in my earlier post. This is often easier said than done. Although it is a very important part, the business case is not purely financial. Key drivers for cloud are often things that are indirectly tied to financials but are the ties to that larger digital transformation strategy.
This can be things like enabling new business opportunities, supporting organizational initiatives, dramatically improving flexibility / agility, as well as the more traditional goals of improving services levels, shifting from CapEx to OpEx, and streamlining operations. These drivers are much harder to quantify, but it must be done as part of the business case and linked to that overarching digital transformation strategy.
Mapping out the financial benefits
The more tangible financial benefits are easier to calculate and compare. For example, calculating current on-premise costs for an application includes licensing, infrastructure, support and administration personnel.
Also, it’s important to use a 3-5 year time frame to evaluate and compare options in order to factor in the maintenance and upgrade costs of a typical on-premise application. Working through these drivers and costs is necessary to answer the question of what your shift to the cloud should look like.
Once you have an initial understanding of the drivers and potential benefits for your shift to the cloud, you must then define your approach.
Iaas, Paas, or Saas?
Should you only consider IaaS? Or also PaaS? Or maybe a combination of different SaaS applications is the best fit for your organization.
Or maybe a combination of all of these along with some on-premise applications is the optimal solution. If you're not clear on what IaaS, PaaS or SaaS is, please check out my earlier posting: Understanding cloud platform services: IaaS, PaaS, SaaS.
Often the best answer is some hybrid approach as most organizations do not fit perfectly into one particular model. Several iterations of investigation and evaluation are usually required to zero in on the optimal solution. Once you’ve decided on your optimal solution, it’s time to go back and refine that business plan to further quantify the costs and benefits.
Please contact us if you need assistance with any part of your journey. We’d be happy to help.