Setting Your Course for Cloud Success

Corey Jacobson, Director, KPMG U.S. Advisory
Corey Jacobson, Director, KPMG U.S. Advisory

Corey Jacobson, Director, KPMG U.S. Advisory

Cloud continues to support businesses’ digital evolution, in part by serving as the reliable glue that connects their disruptive capabilities. Companies are investing in cloud to transform their IT organizations to speed up innovation and solution delivery times, as well as drive IT cost-effectiveness. Even so, organizations are enabling new solutions, and in parallel, migrating their legacy IT environments. These seemly competing initiatives must be aligned in order to generate the most value and ultimately meet business expectations. In response, CIOs are moving quickly to develop holistic cloud strategies to enable and support cloud usage across the entire organization.

Set the Course

Although organizations are deploying a wide range of cloud solutions and are migrating legacy solutions to the cloud, many still lack a comprehensive cloud strategy. Whether the objective is increased flexibility and agility, operational efficiency, cost savings, accelerating time-to-market, or speeding up IT integration and separation activities, organizations’ cloud agend as can significantly impact IT.

To this end, a strong cloud strategy will help ensure the value of the cloud by:

Clearly setting and articulating motivations and objectives. Define the goal for leverage of the cloud. Is it cost savings? Freeing up capital? Increased IT flexibility and agility? Improved IT operational efficiency? Implementing a chargeback model? Or freeing up personnel to work on higher value activities?

Working out which jobs or workloads are suited for the cloud. Analyze the application portfolio to determine which apps have significant fluctuations in demand or are underutilized. These applications tend to be good candidates for the cloud, depending on other factors such as underlying technical and app architecture. In line with a migration factory model, set the disposition of apps including those coming to the end of life. Next, identify a set of non-critical apps across the disposition types to migrate as a suitability test with well-defined success criteria and outcomes.

  In order to move to the cloud, the enterprise must conduct a detailed assessment of legacy applications 

Having Legal and Vendor Management Review Contracts— Service level agreements are often poorly-defined or hard to enforce. For cloud to deliver on its expected value, explicitly define the services levels, who and how services are monitored, how they are measured and reported, and what actions are taken when service levels are not met. Also, clearly define usage tiers and volume usages linked to the pricing models. If it cannot be measured, it cannot be monitored or managed.

Evaluating Cloud Providers— Explore and clearly understand their offerings, pricing models, service levels, resiliency and security requirements, and how usage and billing is calculated. Then, assess the suitability of each provider based on requirements. For example, are there additional licensing costs for databases, apps, or running required operating systems on a specific instance?

Figuring out the Costs— While many organizations start with the premise that cloud computing and storage will be more cost-effective, this is not always the case. First, there’s the shift from capital expenditure to operational expenditure. Second, many factors go into usage costs such as initial capacity, monthly usage percentage, peak capacity needed, service provide support model, network bandwidth used, and storage capacity. But an important note here: organizations are realizing that the real value of cloud services is not the cost savings. It’s the cost-effectiveness of additional flexibility and agility.

Creating a Migration Strategy— There is a common set of methods all organizations should use to alleviate their migration challenges. These include performing application and infrastructure discovery with dispositions, conducting suitability analysis, sequencing and prioritization, rightsizing initial capacity, securing internal stakeholder buy-in, setting migration methods and tools, analyzing and selecting vendors, executing migrations with a “permit to operate” checklist, and decommissioning legacy IT.

Building a Business Case and Roadmap— Determine the three to five-year run rate associated with the following costs: hosting, app management, network, security/compliance, service management, support/operational, and one-time migration including training and organization change management. Identify gross capacity needs for compute, storage, and network, and, using the migration factory dispositions and target cloud option, calculate the monthly run rate for each application.

Navigate the Course

Many companies start out by choosing less critical applications to test the suitability and cost implications of various cloud providers, service models, and solution delivery approaches. However, large-scale initiatives require a robust migration factory capability focusing on application preparedness and value-realization tracking. As migration capabilities mature, IT needs to operationalize them to efficiently move workloads across cloud environments on an on-going basis. This is key to performing cost and feature arbitrage, increasing resiliency and avoiding vendor lock-in.

The factory model is essential to building momentum in cloud adoption as it enables effective and predictable moves to the cloud; it is also critical to establishing on-going workload management. This model relies on a set of well-defined activities and associated performance measures that provide clear transparency into how migrations are conducted, and whether the expected value is achieved. It provides a “permit-to-operate” framework for moving key applications, user accounts, and operational capabilities to the cloud with certain levels of performance, reliability, security, and resiliency that can be measured, monitored and reported.

In order to move to the cloud, the enterprise must conduct a detailed assessment of legacy applications. Understanding architecture and technical requirements, regulatory constraints, cost, security controls, and operational needs are critical to identifying cloud candidates and the appropriate methods and level of effort for migration. They’re also vital input to the cloud business case. However, if not time-boxed, these efforts can easily fail to yield the expected results and slow down the cloud adoption program, thus eroding the value.

Cloud changes the dynamics of IT. It provides users with cost-effective flexibility and agility through a factory and permit-to-operate approach coupled with self-service and automation to choose where workloads will be reliably and securely executed. It makes enterprises’ IT assets, such as computing, storage, and software, more flexible and fluid.

The result is that technology works the way the business and users want it to work. This is the underpinning that connects users wherever they are, from whatever device they use, to the capabilities they want to use. However, unless the business develops a clear strategy and roadmap for how to get there and when, the results will fall short of expectations.

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