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Cloud computing is a major driver of business innovation. Cloud-based platforms in customer relationship management (CRM), e-commerce and analytics are rapidly improving business operations and driving business growth. Cloud modernization can deliver measurable value in weeks or even days. This is a huge shift from the traditional IT delivery model, which can take months or years to yield results.
These successes have created lofty expectations and placed increased pressure on CIOs to accelerate cloud modernization. Therein lies the curse of the cloud: CIOs are being crushed under the weight of expectations that cloud technology has inspired in the industry but are unable to get out from underneath these expectations due to challenges of resources, planning, and mindset.
The good news is that there are patterns and best practices that leading companies have used to successfully address modernization imperatives while delivering business results. Successful modernization programs share several common traits.
1. Instill joint business and technology ownership
Rather than treat cloud modernization as a technology project, leaders put the business vision at the center and develop a plan to unlock value from cloud. This is done by forming a cloud leadership team that is cross-disciplinary and brings together business and technology executives. Leaders in cloud deliberately diversify their teams to better understand and interact with different personalities, cultures, regions, business segments and challenges. This team is responsible for developing and executing the cloud strategy roadmap.
For example, one IBM client was struggling to prioritize their cloud modernization efforts and formed multiple “Cloud Pods” focused on specific functional and departmental business imperatives. These pods were made up of business and technology leaders and teams across the enterprise and tasked with identifying the most valuable use cases and opportunities for cloud. Rather than just addressing the technology transition of application workloads, they enabled cross-disciplinary focus to develop, prioritize and plan cloud initiatives that drove business value.
2. Build the backbone for cloud control
Successful leaders establish a cloud architecture foundation along with strong controls to manage and govern the way that cloud services are used. They also invest in training development and operations teams on cloud best practices and build the scaffolding or library of cloud-ready patterns and components that can be reused across the enterprise. For example, one client found that complexity quickly grew as they adopted cloud across the enterprise. We recommended and implemented a “Cloud API Academy” to train their development teams on best practices in API development. In addition, they formed a “Cloud Adoption Council” to govern major development efforts and ensure that they conform with standards and best practices.
3. Digitally transform IT
Leaders apply digital thinking and technology to their own operations. This includes leveraging data and AI to develop self-healing operations capabilities which automates end-to-end application delivery. Leaders also create a cloud operations center that is responsible for converting operational best practices, driving automation and self-service. One client began a digital transformation by exploring end-to-end automation opportunities across IT as they moved to cloud. This included an exhaustive inventory of key processes and tasks that were candidates for automation. The company then prioritized these areas for automation and applied consistent tooling and standards across these processes.
4. Establish FinOps
By putting an operating model in place, leaders gain transparency into the financials and operations of IT. They then systematically train IT leadership on the foundations of financial management in technology. This allows them to measure and evaluate cloud investments in the same way they measure other business investments. Reporting and chargeback (or “show back”) mechanisms give management insight into how cloud is being used as well as the associated costs. One client implemented FinOps capabilities which included setting up a cloud cost center, mapping cloud services to consumers and allocating costs to lines of business. All of this was integrated into their self-service cloud foundation so that reporting was automated from the point that cloud resources were provisioned. Across our clients where we implement FinOps, we routinely find savings of 10-30% in cloud service and technology costs.
Modernization is imperative for companies in nearly every industry. Cloud is a powerful enabler of modernization, but it is not a panacea. To avoid being crushed under the weight of increased expectations of cloud, CIOs must partner with business leaders to ensure joint accountability for success. In addition, they must build the capabilities to manage and monitor their cloud platform to address the added complexity that it brings to their landscape.