Extract maximum value from the cloud by adopting a transformational mindset
Whereas moving to the cloud was once the primary goal, more and more companies are now focused on making their results match up to their original expectations. Having assumed that migrating workloads to the cloud would be a ticket to instant cost savings and innovation, they are becoming disillusioned with the results they are seeing. Internationally, cost overruns for cloud migration amount to more than $100 billion in wasted spend over three years, with inefficiencies costing the average company 14% more than planned each year.
But while many companies are blowing their cloud budgets with little to show for it, others are nailing it when it comes to realizing the benefits of cloud transformation. Their cloud usage goes beyond simple storage and database management to leveraging cloud infrastructure and computing capabilities for rapid scaling and continuous innovation. And other organizations can follow their lead to take control of their cloud use and become truly cloud-savvy.
Why just being in the cloud is not enough
Transitioning to the cloud can generate huge cost savings for your business. The cloud gives businesses access to automated capabilities they could never afford to develop themselves, and cloud providers can leverage workload usage patterns to run their assets at much higher utilization levels.
However, many cloud migration attempts fail to deliver the desired cost savings. The complex nature of cloud economics demands a deep understanding of the demand-led nature of the consumption model, with customers having to adapt their existing accounting structures to align with it.
In fact, without appropriate optimization or remediation, lift-and-shift migrations of legacy applications to the cloud can actually increase costs. This is because these applications were designed to run in a data center, so they will perform suboptimally and generate substantial network traffic that can become very costly when run in the cloud.
Where leadership comes into cloud transformation
If generating cost savings from the cloud is hard, harnessing it for even greater transformational value might seem like an impossible dream. But the secret to becoming cloud-savvy lies in approaching it with a transformational mindset – and that starts at the top. Among cloud adopters, those who perform best are 32% more likely than the rest to have active CEO sponsors.
Leaders must endorse and roll out a comprehensive cloud road map designed to realize more than just cost benefits. Taking a broader approach to mapping the company’s cloud goals should encompass wider aims aligned with the cloud’s strengths, such as improving agility and the capacity to respond quickly to changes.
Cloud elasticity means computing resources can be scaled up or down as demand dictates. The cloud’s suitability for building small-scale environments swiftly and cheaply makes it the ideal platform for trying out digital products before you release them. Leaders need to create a vision for their companies in which these and other key strengths of the cloud are mined for maximum benefit.
CEOs can help the senior team understand that infrastructure investments in cloud platforms are not simply a cost that needs to be managed but a rich source of competitive advantage. When the entire leadership team shares this view, it is easier to drive an astute cloud policy in which the process of funding technology shifts away from projects toward products and platforms.
How to develop cloud-savviness
The kind of cloud transformation that uses the cloud to create maximum business value pairs cloud-native technology with a culture that encourages a cloud-ready workforce to pursue innovative ways of doing things.
When the power of the cloud is applied to technologies such as artificial intelligence (AI) and data analytics, its potential for unlocking the kind of insights that drive sustained, increased revenue explodes. However, for this kind of cloud transformation, you need to focus on making your IT estate as cloud native as possible, exploiting the scalability and resilience enabled by the cloud rather than simply replicating your existing architecture, security practices and IT operational models in the cloud.
The “lift and shift” approach not only neglects the cloud’s true potential; it can also be expensive. Failing to rearchitect workloads to leverage the benefits of the cloud can surface a range of costs that were not applicable when they ran on premises. Legacy applications were architected to run in a data center, so they can generate significant network traffic, which makes them expensive to run in the cloud.
To start the process of optimizing applications to run in the cloud, businesses can replatform applications – virtualizing them but leaving them as they are. This leverages some cloud capabilities while avoiding the labor-intensive work of decomposing large, complex, business-critical monolithic applications. However, to leverage the full benefits of the cloud, monolithic applications may have to be rearchitected. This involves disassembling them and rebuilding them in a cloud-native way, with the eventual aim of moving the entire application to the cloud.
Cloud may be a key enabler of successful business transformation, but you won’t exploit its full potential value without integrating functions and processes and enabling intelligence and interoperability in your organization. You may have to rethink how your business works at a fundamental level, making the challenge of harnessing it effectively as much social and organizational as it is technical.
For cloud technologies to have maximum impact, it is important to ensure your workforce is focused on the strategic value of cloud computing. Instead of considering which applications to migrate, your team needs a broader perspective. They need to be thinking about what cloud strategy is required to get to market faster or innovate more effectively and what skills are required to make that strategy a reality. That kind of perspective demands a more comprehensive knowledge base than a list of certificates, as well as a tendency toward big-picture, cross-discipline thinking.
Open and innovative culture
Nurturing a cloud-ready workforce involves implementing new ways of working and developing new roles and skills. This could be a significant departure for your business, so you need to ensure that your team feels comfortable expressing concerns and requesting support with the changes involved.
It is likely that you will need to focus effort on recruiting advanced skillsets to extract maximum business value from the cloud, but you also need to upskill internally. That will involve training in disciplines such as data management and analysis, AI and cybersecurity in an open, innovative organizational culture. By implementing the right upskilling programs and different operating models, you can help transform how your team works and meets constantly evolving needs.
Partnering for success
Introducing the kind of change that identifies your business as a cloud-savvy one involves a commitment to transformation and a willingness to carry it through. Embarking on such an enormous undertaking is easier and more likely to succeed if you leverage the skills and experience of an appropriate cloud partner. With the right expertise and guidance, you can ensure the cloud delivers on its promise for your business.