The one stop strategy to move to Cloud
By: Nikhil Warrier
Tags: Future Technology, Cio Agenda, Cloud Computing, Technology Strategy, Solutions

Why the CIO handbook needs a further relook

For companies that have been around for many years and decades — IT has been an auxiliary function that aids the organization but is not recognized as a strong contributor to its success. The times have since rapidly changed, IT has now become one of the protagonists for the success of the organization, closely enabling organizations to achieve their primary goals. Business disruption and innovations are driven and accelerated by digital transformation. A key constituent being, ‘Cloud Transformations’. While this is an oft repeated term and is on every CIO, CTO’s agenda— moving ahead from agendas, kickoff meetings, offsite conversations to an execution step is still a leap not many are prepared to take. It is still a leap of faith, of discovery, of not knowing if the journey actually leads to the destination.

Photo by Alex Radelich on Unsplash

Why is it so difficult to commit a move to Cloud?

First off, consider any large corporation running multiple lines of business across geographies, with individual geographies running their own independent businesses, with respective regional regulations governing their operations. For such organizations, a move to the cloud (partly or in entirety) needs a strong sponsorship within. This would typically come from the CIO / CTO org. who see clear gains with a cloud transformation. There is also a need to advocate to the other CxOs — typically finance, commercial /business, and in some cases — even the CEO. The reason why typically many transformations do not get a go-ahead, or start and meander, is because the organization does not really see a key need except for their IT, and are unsure of the value it will provide for the business, the risks and the investments notwithstanding. There are the General Electrics (GE), eBays, Airbnbs of the world who through a well thought out approach moved to Cloud and are reaping good benefits.

Also — through the last few years, Cloud transformations have been assumed to primarily lead to cost efficiencies, and reducing the total cost of ownership (TCO), There is a unilateral mindset (sometimes stubborn) with most customers, on this being the sole / the key benefit they should expect. Opex better than Capex is a rhyme that has seldom run out of tune. And if Opex does not save, go back to Capex. It was justified for Dropbox saving ~$75M, an oft quoted example for cloud repatriation.(moving back on-premise from the cloud), Zynga (think of the Farmville game on Facebook)— a mobile gaming company was another one to move back to its own infrastructure. (More on that later…) It is easy to see how the positioning of cloud as a cost reduction machine sold itself well enough- thus far, but with the need for digital transformation at the intersection of business and technology, Cost efficiencies are hardly the keys to the kingdom. Responding faster than the competition, creating high value services at a fraction of time — compared to an on-premise setup, leveraging the power of native services to integrate, scale and expand and still be reliable — are more telling critical success factors.

Modernization

Modernization is a buzz-word that has a good ring to the ears. What it does not explain is the sheer volume of legacy systems and code that need to be modernized (not even speaking of the skills needed). Many of these become exponentially difficult when you dive down from a 1000 feet view to a 10–20 feet view. Consider Mainframes — Giant machines processing millions of transactions per second, completely ruling the airlines and most of the banks, retailers, insurance providers. It is no easy task committing and beginning a plan to modernize mainframes. It takes a long time to add new mainframe features, and is extremely tough on budgets. There is a modernization space that is brewing for mainframes as well (with the likes of the work done by Microfocus, Heirloom) — something the customers will need to measure up and look beyond the immediate horizon, — which leads me to my next point

Myopic vision to cloud

Most of the customers who missed the bus to become first movers to cloud, speak of quick wins, in order to evaluate if cloud is indeed the right decision. Quick wins can be bit of a stumbling block for those who have a short sighted view of getting gains — to influence their own top tier perhaps, to convince themselves that this is worth pursuing. Adapting to a cloud operating model of work, needs more of an eagle vision — look deep and sharp, but also look far, know what the transformation actually means and the investments that are needed to realize the advertised benefits.

What to expect with a cloud transformation — what ‘should’ the future look like

A cloud transformation like any other tech driven transformation takes work, and takes time. The true value of the transformation is realized as the organization goes up on the maturity scale. Organizations that have handled the transformations well are those that are more cloud aligned and native than just being cloud ready. In most cases, the transformation will mean a overshoot of expenditure in the near term since the on-premise environments will function in addition to the new cloud foundation. This will gradually taper until a transition point where either the customer decides to do away with their data center environments and investments entirely or reduce data center expenditure and go hybrid. The ROI at this phase is more of the business agility that the cloud operating model would provide, Newer product releases would now begin to be faster with a DevOps Continuous integration and Continuous Deployment methodology kicking in. Typically a factor of 30–50% increased velocity in moving new code to market is not uncommon. The in house IT will also begin to realize that a lot of the tasks that used to take up their hours — rack, stack, cabling, powering on/off, backups, monitoring and similar tasks are cloud provider managed, leading to more productivity, which in the case of other deployment models like PaaS and SaaS — becomes even more pronounced. Scale, availability and resilience are big ticket items in the first phases of a transformation, There is increased performance even during usage spikes (Think of Black Friday sales and the expected performance)and recovery from a failure turns out to be much faster.

Cloud and Digital transformation have been used in tandem and for the most part Cloud enables this digital transformation, With digital themes like Artificial intelligence and analytics, Industry 4.0 and IoT connected offices, vehicles and Blockchain — Cloud forms a foundation for all of these services to integrate with business processes and add value. All of this can lead to a better customer experience which in turn can feed into better customer satisfaction scores.

How to extract the most value out of a cloud transformation

Top of the tree on getting value, is — well, driving this initiative top of the tree!, with orchestration, funding, definition of value coming in right from the top, Once that sets in — the rest of the ride is less treacherous.

Every cloud journey is different, and brings its own nuances — of the industry, the key stakeholders, the specific business problem needing the transformation, key outcomes expected, their existing levels of maturity.

A key success factor in a transformation is to accurately chart the path from the current maturity levels to the desired / industry standard levels. Determining the current state of the customer cloud maturity is dependent on the accuracy and recency of the ecosystem data — around the lines of business, the infrastructure that supports it and the integrations that glue them together. With a well defined baseline for where the customer stands today, a roadmap towards the desired state can be better defined, and more value can be obtained.

Another key aspect is a cloud focused organization — in most cases referred to as a Cloud Center of excellence to be setup within the customer organization, that can orchestrate the cloud strategy within and pass the new culture onward. This is a cross functional group with representation across business and IT, and tasked with setting the cloud strategy in motion. This group helps align incoming business demand with the new age tech engine that cloud brings, along with the structure to look at the cloud journey from three different perspectives — Strategy, design and operations.A cloud journey can be a difficult one to take for organizations that do not have the same ethos or the skills to get it working. There is a need for all stakeholders to be aligned and engaged, for the future processes to be defined, for it to be communicated through the layers in the org. For all of this to be manifested, a brand new or redesigned operating model becomes vital. An operating model that can interface all key cloud stakeholders with a hybrid multi cloud environment along with the tools and processes ecosystem. There needs to be a transformation exercise for the workforce as well, as they get ready to handle newer challenges on the cloud, pick up new skills, roles, while keeping the lights on, with everything that they have been owning and leading. There is incentive in creating a new learning task force, in providing more motivation and skill in navigating the transformation waves that would hit their shores.

The strongest glue in all of this is an organizational change management exercise — and this is one of the tough ones. As the organization starts building on a new roadmap to change the world, the staff may just be unaware of the changes in the making, there may be also be skepticism around the motives of the transformation. This needs culture assessments, surveys, executive messaging and communication/mitigation plans, a tieback to the employee skill buildup plan with training, and rigorous orchestration and tracking. The non actors in the big plan need to start getting aware of the changes, becoming comfortable with it, and start accepting and excelling in the new roles and organization structures

Sustaining the cloud momentum and then stepping on the gas!

So now, there is a brand new cloud organization, some key folks stepping up and running the cloud show, moving applications to cloud and getting one-up on their competitors in planning a new Go-To-Market strategy.

Sustaining a cloud transformation to deliver the promised value and ROI, needs a comprehensive and well designed cloud governance framework — to keep the operations agile, aligned with business outcomes and costs in control. Ensuring that this framework fits into the overall cloud ecosystem is a key starting point. It needs setting up of policies, intake processes, guidelines, SOPs for the governance framework. Setting up seamless governance needs a strong tool ecosystem integration and automation to ensure that there is a predictable definition for success at low turnaround times. Typically there are 4 focus areas for cloud governance — technology, financials, operations , security. Each wheel is critical for the all terrain cloud vehicle to run smooth and fast.

Technology governance — Around getting the technology ready and relevant for the cloud (including cloud brokerage services)

Financial governance — Focus on spend visibility, allocation and optimization

Operations — Services and resource management through a user driven catalog

Security — Guard rails and regulatory compliance controls across industries

A key part of the governance framework is the tracking and monitoring of the success factors to ensure that deviations are quickly picked up and addressed. The stage is now set for the organization to go completely cloud native with its innovation roadmap, bringing the true power of the cloud to the fore. Distributed clouds, microservices based applications and service meshes, container orchestration, monitoring and security — all contribute to enhancing the scale, speed and value. Building a cloud aligned and native organization to compete with digital natives and an ever changing business and tech landscape is not easy, your well-defined cloud strategy can get you there! Thinking caps off, Doing caps on!

And as for Zynga, they were back into the Cloud fold before long, to build further on their innovation driven gaming journey.