Cloud Transformation is Hard … And Worth It

Complex, and often long, cloud transformation results in an organization that can execute at a higher rate of speed, learn from failures and constantly improve.

Many enterprises are struggling with the same transformation challenge: how to create an organization that can quickly adopt new technology while responding to immediate market needs and new competitive threats. The transition to becoming that kind of operation is not simple. It involves all aspects of an organization developing new muscle memory based on new ways to operate that are accepting of learning and failure. It also requires empowering staff to make rapid decisions driven by common organizational direction and principles. Cloud is the platform component that enables a more agile, responsive organization. But consuming cloud in a way that a business can also transform requires a coordinated effort across multiple domains. All aspects of the people, process and technology components of an organization are impacted as it matures from current to new operational models. Exhibit 1 outlines the key changes that must occur in order to maximize velocity. The primary change is the move from approval-based processes to a focus on exception handling and constant organizational improvement.

Exhibit 1 – Key Changes to Maximize Velocity

Many organizations start their cloud adoption journey with the intention of saving costs on IT operations. Its larger benefit to an organization is in enabling faster time to market for new products and capabilities. The real value of cloud transformation is the organization’s new ability to quickly consume the latest technology and rapidly adapt and respond to market needs.

Determining an organization’s cloud transformation maturity requires careful measurement of both current maturity levels and the level of effort necessary to transition to the next higher state. Exhibit 2 shows 9 dimensions you can use to measure current cloud maturity and track organizational plans to achieve the next level.

Cloud transformation was originally heralded as a path forward for organizations to become more competitive, more agile and more easily recruit the best talent. But the reality is, transformation has become a sticking point for many organizations. There are several intersecting reasons for this:

Years to Build Can Take Quarters to Untangle – Many of today’s business systems took years, even decades, to build. Consequently, they possess a level of unknown complexity that takes time to understand, untangle and improve. Many organizations are not prepared for the sustained programming investment necessary to untangle these complex systems.
Business Cycles – The usual business cycles associated with market changes, mergers & acquisitions and divestitures takes a toll on organizational change. These dynamics introduce time-bound projects that consume resources and attention. But cloud transformation is often not something that can be time bound; rather, it moves at a pace driven by the organization’s level of acceptance and readiness.
Changing Regulatory Landscapes – Many industries, both in the U.S. and abroad, continue to see regulations change. This changing landscape makes risk averse leadership reluctant to invest in programs that might not meet new regulatory standards.

All of this inertia leads to an incorrect strategy demanded by a top executive, if there is any strategy at all. Organizations often think they can tell their top IT guy to move to the cloud because we have to with no consideration for the true transformation required. The objective cannot be to simply save money and have all problems taken away. In fact, the cloud can save you money overall and take many problems away, but without the correct strategy it can cost significantly more and add significant headaches.

Eight key thingscan be done to control the cloud migration process.

Set a specific strategy for what you want to accomplish.
Evaluate all target systems, people, and processes for cloud readiness (Exhibit 2 is a good measuring stick).
Do not just lift and shift applications if there is no urgency. Re-architect, redesign, or rebuild applications to fit a cloud-first architecture. If your application is primarily going to live on VM’s, it will cost more unnecessarily. If the organization does not have the expertise to re-architect the application, an outside, cloud-focused firm should be engaged. The end result of this process should be a reference architecture that will guide your journey forward.
Re-development for cloud should be scaffolded by a senior, cloud-experienced developer. If you do not have the expertise, go to an outside firm who can help you, but is willing to work with your team. It is critical that your internal team has buy in on the development.
Have a cloud engineering firm architect and buildout the cloud infrastructure to match a target reference architecture. Consider using Terraform with the cloud’s CLI to build and control the environments. This should help ensure proper design.
Develop a roadmap for your migration journey with definable stages. Ensure IT, product management and senior executives are in alignment with the objectives to be achieved.
Develop a project plan with targeted dates and achievements. Have an experienced technical project manager run the project. Require weekly+ accountability for milestone achievement and accountability.
Develop a governance process for deployments, infrastructure changes, and any changes in dates or scope to the migration. Appoint a person on the team to monitor cloud costs on at least a weekly basis to ensure accountability and allow for course correction.

The key words above are Planning & Accountability. This will take you far in a successful migration. You might be asking what tangible savings can I realize from a cloud migration, if any. They include:

Saving from hosting on cloud native services. These will generally cost less if not using virtual machines. Overall, application hosting may not save a great deal or may cost more if you are using old and unmaintained hardware. Make sure you include hardware maintenance, patching, and downtime in your cost assessments.
Saving from networking. Cloud networking is virtually free. No more shaky network connections.
Saving on security hardware and software. Cloud security infrastructure is a fraction of the cost, especially if using cloud native services. Public clouds block IP ping and DDoS for free. Load balancers, basic firewalls, private IPs, full subnets, etc. are virtually free. Security software can also provide massive savings if you are willing to use vendors that do not have a foothold in equipment. Savings of up to 80% can be realized.
Savings on personnel. Cloud staff will cost more on a per person cost, but you will almost certainly need less people (up to 75%) if fully migrated to the cloud.
Saving on software development. Cloud ready software is broken into feature-level components and is easier to maintain and deploy.
Savings on speed of delivery, speed to market, and lost opportunities. This is soft cost that cannot be measured with direct dollars but can be the difference in the commercial marketplace.

Key Elements to Accelerate Growth

With a successful cloud transformation, come several key elements that can accelerate growth for the organization:

Innovation – A company can live and die on the ideas its staff can come up with and quickly incubate into products. A cloud mature organization with a learning culture can encourage staff to try new things, test new products and fail fast.
Cost Optimization – Cost savings are no longer the focus, as the ability to optimize cost to market conditions emerges. Cloud mature organizations can measure their investment against key value chains and determine if that investment is optimized based on the company’s P&L.
Recruiting Top Talent – Organizations define success with the talent that they can hire and mature internally. Organizations must focus on finding people who are adaptive, self-learning, highly engaged and dynamic. These traits ensure individuals evolve with the company, demanding improvement in everything they do and lifting the organization during their tenure.

Upon the successful transition to a modern approach to technology, organizations will be able to quickly move from idea to pilot projects to production, as the benefits of their new capabilities are realized. The value of this complex and often long cloud transformation is in creating an organization that can execute at a higher rate of speed, learn from failures and constantly improve, while developing a pool of talent that is always looking for new ways to improve and innovate.