With its promise of improved efficiency and agility, cloud computing commands increasing attention from today’s business executives and IT professionals. However, jumping into the cloud without a clear strategy that is aligned with business goals may produce some short term wins, but will almost always result in unexpected costs and poorly governed data and applications – not to mention strategic lost opportunity for system integration.
Unfortunately, too many companies are doing just this, that is, moving to the cloud without a business-aligned strategy or justifying their actions by defining quantified expectations of success. According to a 2015 IDC global survey of executives at enterprises actively using the cloud for multiple workloads, only one in four enterprises possesses a coherent cloud strategy. The survey found that 32 percent of organizations have no cloud strategy, 11 percent have an opportunistic strategy and 32 percent are operating on an ad hoc basis – essentially winging it.
Why are otherwise rational decision-makers investing in cloud technology without understanding its business purpose? Too often, the motivation is fear.
Many organizations feel enormous pressure to use the cloud so that others will view them as innovative, forward-thinking businesses. That pressure leads business leaders to rush to take action, move too quickly into cloud usage and as a result, choose the wrong cloud platform for their enterprise.
The hidden costs of cloud usage
A successful San Francisco area software company illustrates the potential consequences of ignoring the economics of cloud computing. To improve its time to market, the company decided its application developers would start using the cloud. But the business side didn’t consult with the IT department, in part because it didn’t trust IT’s ability to launch an agile, scalable cloud in a timely manner. Instead, the company’s application developers began signing up for monthly, service-based subscriptions with Amazon Web Services (AWS) without any governance from IT.
The developers’ initial cloud projects started small and scored admirable successes. Soon developers across the company were using public cloud providers of their individual choice, creating unsupervised “shadow clouds” throughout the organization. It became commonplace for application developers to rent space on AWS for a month, but use it for only a few days (or, in some instances, a few hours). The company also allowed developers to deploy cloud services at will, using personal or corporate credit cards.
As a result, without a comprehensive understanding of its cloud usage, the software company incurred excessive costs due to employees’ unsupervised use of cloud services. Those costs grew rapidly, eventually reaching $1 million per month. In addition, the company used cloud resources so inefficiently that its efforts undermined the long-term goal of improving business operations.
Don’t allow your company to fall into this trap.
Creating a sustainable cloud strategy
Your company can realize the cost and innovation benefits of cloud computing, but only if it deploys the platform to achieve specific business goals. Your IT department should consider these five factors when formulating a cloud computing strategy.
Understand your business and its priorities.
IT must think like business executives and managers, not just technologists. The first step is making sure you have a good understanding of the company’s overall business strategy, its chief competitors, emerging players and any potential areas of revenue. Form a comprehensive view of the business to determine how IT can be of strategic assistance using cloud technologies.
Define your current position to determine the next moves.
If your organization isn’t yet using the cloud, take account of its current assets, including hardware, software and talent. Understand what you have and how are you using it. Also be aware of your company’s expectation of future growth – or contraction.
If you’ve inherited a public, private or hybrid cloud, or you have business units that have signed up for cloud services without involvement from IT, find out who is using the cloud and which services people are using, and track those costs. This becomes the basis for your baseline to justify your cloud strategy and your transformation techniques.
Collaborate across the enterprise
When discussing possible cloud usage, those on the IT side must understand the needs, constraints and goals of their colleagues on the business side. If there is “shadow cloud,” find out why that decision was made. Find ways for you and your staff to bond with the business side and develop a trust-based, mutually respectful relationship. Although this can take a significant amount of time and effort, when done right, it produces the strong working partnership that is necessary for successful cloud enablement.
Be an asset to the business
IT is undergoing a paradigm shift as its role changes from being a supplier of technology to being the provider of the services that drive a company’s business. However, many organizations still see IT as a business expense rather than as a valued company asset. To change this perception, IT departments should actively market their services and value within the organization. This is a somewhat foreign concept to IT departments, and they will need to invest and train the existing team to become effective.
Once your cloud is safely launched (or relaunched), it’s time to consider your next move. You’ve demonstrated to the business side that IT knows cloud computing; now build on that. The key is to focus your time and energy on business outcomes, not IT outcomes.
Cloud computing can improve a business’s ability to adapt to new opportunities and threats, but simply shifting workloads and developer activities to a public cloud does not guarantee cost savings or improved productivity. By taking a thoughtful, strategic approach to cloud usage and implementation, you can ensure your cloud strategy seamlessly aligns with your company’s business strategy to avoid unanticipated costs and support desired business outcomes.