Moving to Cloud Changes How You Run IT (Part 2)

In my last blog, I talked about why realizing the full benefits of cloud requires a fundamental change in how organizations run IT – starting by shifting the focus from technology to business outcomes.

To do this effectively, business and IT must work together as partners, sharing a strategic vision for the organization. Often, a Cloud Target Operating Model (CTOM) is used to map the expected business benefits of cloud technology and resulting in a transformative business model across the organization – people, processes and technology.

No matter what size your company is and where you are in the journey to cloud, your organization can achieve all the benefits cloud has to offer – provided business and IT are willing to work in sync. It’s all about adopting a cloud mindset. Let’s dig a little deeper into how that plays out.

Where are Canadian companies right now?

Not surprisingly, Canadian companies are at varying stages of cloud adoption – and are approaching the journey in a variety of own unique ways. Overall, more than three-quarters of Canadian organizations have migrated at least some of their IT service delivery to the cloud.

A common perception in the IT industry is that Canada lags 12-18 months behind the U.S. in the adoption of most new technology. Whether that is because we are more cautious about new technology, our big businesses are relatively smaller, or if it’s just an industry myth, in my experience it does seem to be true in the journey to cloud. Often, clients have cloud programs with set goals, but the level of transformation activity isn’t at the same level as we see with our U.S. clients.

Whether small or large, Canadian firms often say that they are still in the early stages of building their cloud capability and that they expect to mature capability, processes and skill levels significantly over the next three years.

Adopting a cloud mindset starts with thinking “cloud first” rather than simply “lift and shift.” McKinsey recently noted that the majority of cloud migration spending today is “lift and shift.” This is certainly true in Canada. While this approach has its merits, in many cases, lift and shift can lead to a more complex IT environment. As the McKinsey study explains, “Just taking legacy applications and moving them to the cloud will not automatically yield the benefits that cloud infrastructure and systems can provide. In fact, in some cases, that approach can result in IT architectures that are more complex, cumbersome, and costly than before.”

Not surprisingly, migration is easier for some than others. For “born on the cloud” organizations, digital transformation is as natural as breathing. DevOps, agile, containers – it’s just business as usual. On the other hand, cloud adoption is going to take more time, and change will be more difficult, for older, large organizations with mission-critical legacy applications.

For these older companies, the success metric will depend on how they handle two major shifts ahead:

  • changing the technology itself and
  • changing the culture of the organization as they find partners and gain the skills needed to orchestrate and integrate the total service to the organization.

Developing an agile ethos

Agile is much more than just a daily stand-up! Many organizations haven’t really adopted an agile ethos, nor have they fundamentally changed their processes. Are you part of a large enterprise with a legacy environment? Don’t assume that if “you’re big, you’re slow.” If there is a culture of experimentation within the organization – a willingness to fail fast, learn and adapt – it won’t necessarily take longer to start to achieve the benefits associated with cloud. Similarly, just because you’re small doesn’t mean you are nimble.  Agility is key.

Some may have entered the cloud world without a strategic plan. They may have started acquiring cloud without realizing the challenges of multiple clouds or purchased tools that promise to streamline development without addressing the end to end production cycle.

Make sure you answer the important questions around how you are getting to cloud just as much as why. How are you going to govern your cloud environment? Scale it? Architect and manage it? Starting with the CTOM helps frame where you want to go so everyone involved has bought into the vision – while ensuring minimal losses because risk is understood and accounted for.

How long does this transformation take?

Rewriting mission-critical applications to optimize them for the cloud can certainly be very costly. Many organizations need to see the business value of migrating to cloud to justify the spending. If yours is an organization where change is challenging and cost constraints are an issue, an iterative approach makes the most sense.

And it’s important to recognize not every application belongs on the cloud. Some workloads are better suited to a traditional data centre environment for security reasons or because they are infrequently updated. These workloads will always exist alongside multi cloud and hybrid cloud environments.

The point here is to be sure you are using the right technique for the right services, based on your target operating model. In that case, a technology refresh can benefit from DevOps or agile techniques — whether it’s on cloud or on prem.

How to realize business benefits from cloud

The biggest benefit of cloud is that it enables your organization’s digital transformation. This is most effective when there is awareness and integration between the strategic plans for the infrastructure, the applications, the IT processes, and the business processes. The speed of digital transformation is driven by the availability of your business application components – whether APIs or microservices are ‘cloud ready’. This will drive the agility that digital transformation requires.

When organizations hit roadblocks in achieving benefits from cloud, a deeper look often reveals a series of separate initiatives: cloud migration in one area, digital transformation somewhere else; and DevOps being run without actually merging the functions of the development team and the operations team. Without an integrated vision, you may be migrating the wrong applications in terms of maximizing the value of your digital initiatives.

With the vast amounts of data most businesses generate, equally vast computing resources are required to analyze the data and turn it into actionable information. The ability to scale resources up and down to respond on demand is another cloud benefit, allowing organizations to scale and grow workloads as needed.

Finally, while cloud can save your organization money, there is no guarantee that cloud will always – or even usually – cost less than traditional on-prem. The key cost benefit of cloud is being able to spend at the point of usage rather than upfront; and being able to target spending where it is most needed at any point in time.

Think big, start small

No matter what size your company is and where you are in your cloud journey, adopting a cloud mindset lets you realize business and IT benefits along the way.

ThinkBigStartSmall
image credit: Eric Dymond

We advise clients to start small, learn quickly, then adapt and expand. Pick one area. For example, you can start with a small HR project, and leverage that experience and knowledge across other areas of the organization. Although your ability to reap benefits quickly depends on your CTOM, cloud technologies operating at peak efficiency will:

  • Provide flexibility and scalability. The faster you release services into production, the faster you can respond to business needs in response to market demands.
  • Remove project irritants. Organizations are facing inevitable refresh and replacement demand. By moving that stream onto the cloud, IT can more easily maintain day-to-day services to the business.
  • Provide access management and cost control. Like a utility, cloud lets you pay only for the services you need, when you need them – with the bonus of backup and recovery that might not have been affordable in an on-prem environment.

 

Cloud first puts customers first

As I said in my last blog, cloud by itself will not magically drive savings and productivity, make users happier, or make your company more agile. A cloud-first strategy is designed to remove limitations that have crept into the organization’s business models, and it is fundamentally changing how organizations do business and how they run IT.

A successful move to cloud will align business and IT in a way that supports your organization’s drive to become a customer-centric enterprise. Done right, a cloud for the real world gives you the flexibility, speed and control to capitalize on tomorrow’s big opportunity.

Thanks to colleagues Kristen Leroux and Brian Franks for sharing their thoughts in shaping this post.

 

See How Cloud Storage Has Changed the Way We Work

Read the article Cloud Adoption to Accelerate IT Modernization

Read the blog Cloud modernization: A holistic approach

10 Lessons Learned Taking the Fortune 100 to the Cloud 

Read the blog Cloud modernization: Cultural and workplace adoption

 

Published by

Mark Dymond, P.Eng

With over 20 years of consulting experience I've worked with clients in the banking, retail, travel and government sectors. Based in Toronto, Canada, currently I lead the Cloud consulting team for IBM Canada. I've led successful project and program teams in Canada, the US, and Europe of more than 200 people. Thoughts, comments and mistakes are most definitely my own!

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