Cloud Really is the Silver Lining for Digital Transformation

Mark Reid

Mark Reid is an international, multi sector/industry, transformational CIO, aligning business needs with technology led transformations and delivering transformational technology strategies to support business objectives.

Mark has recently joined Alium Partners network of C-Suite executives.

A great article by Mark Reid, Interim CIO and Transformation specialist, following on from the role of the CIO in these challenging times, by providing more insight on some of these considerations and offering some quick tips on how to deal with them.

The world of technology is filled with examples where reality has failed to live up to the hype but momentum has been building with cloud services over a number of years and the last few months will, for many organisations, have been the ultimate proving ground to show that cloud services are definitely here to stay.

As usage for the likes of Teams, Zoom, Azure, AWS boomed during lockdown, demand across the whole cloud service marketplace is set to grow even stronger as organisations now accelerate their digital transformation plans.

The silver lining comes because cloud services enable an organisation to deliver this transformation with:

  • greater speed
  • greater agility
  • greater flexibility
  • greater resilience

While that sounds perfect and CEOs demand that everything moves to the cloud, the transition to a “Cloud First” model is not a simple “subscribe and run” operation but comes with some important considerations when making the journey.

This short article builds on my previous blog about the role of the CIO in these challenging times, by providing more insight on some of these considerations and offering some quick tips on how to deal with them.

1. WHY THE NUMBERS MATTER

A quick on-line search will get you to any number of definitions for cloud services. SaaS, PaaS, IaaS, BPaaS, DRaaS, I could go on, and now basically any “service” that is provided off-client premise is deemed a cloud service. I won’t be re-inventing the wheel on these.

More crucial to the definition is the subscription based nature of the cost, thereby pushing the service costs into the opex budget. This is an important consideration in shifting to a cloud based architecture and one that should not be underestimated for many organisations who previously would have relied on capex to provide the flexibility to their IT funding.

At a time when cost optimisation will be a critical focus for business leaders, it’s important that the C-suite understand the budget principles and impact of switching to a cloud based model. This is an easy sell if usage delivers an obvious cost saving but this may not necessarily be the case if, for example, there’s no legacy replacement or it supports a new channel.

Quick Tips:

  • Re-model the IT budget based on the cloud service costs
  • Build in some realistic usage scaling scenarios and update this as you assess new services.
  • Share budget principles and impact with the C-suite
2. WHATEVER HAPPENS, DON’T FORGET THE BUSINESS

Cloud First as a technology strategy, most definitely yes, but don’t let the technology tail wag the dog. Organisations need to have clear understanding of how cloud services will support their business technology operating model. This model links the technology requirements back to business objectives and the business value chain.

At this point I like to think in terms of business services rather than cloud services as this brings in the critical elements of people and processes. The formation of this model is a topic on its own but it forms the bedrock for any digital transformation plans and enables a business to prioritise the areas to focus on.

Governance becomes key to controlling the fit of any cloud service to this model and brings some control over the costs and risks associated with organisational cloud sprawl.

Quick tips:

  • Create a business-technology operating model at the outset
  • Set up governance to use this as a reference point for your cloud service selection and fit
  • Consider the impact of each service on people and processes
3. ….AND DON’T FORGET YOUR OVERALL TECHNICAL AND DATA ARCHITECTURE

At a technical level, it’s important to know how a cloud service will sit within your overall technical and data architecture before signing up. Unmanaged or uncontrolled cloud can come back and bite you. Retrospective fitting of integrations or data upload/extractions, to say a CRM or ERP cloud, can have significant technical, cost and contractional implications.

Data is now a critical component of successful digital transformation; every click, every transaction, every alert tells a story. Cloud services will be the provider of data but can also be the analytics platform, so setting out a data strategy and architecture at the outset is of paramount importance.

Quick tips:

  • Ensure you have a technical and data architecture in place
  • Think through integration and data requirements for a cloud service
  • Don’t underestimate the effort and skills required for your data work
4. DON’T BELIEVE EVERYTHING YOU’RE TOLD

Remember the famous “Zoom bombings” security issue, where hackers could enter a chat and post unpleasant material? Although now fixed, this is just an example of how you can’t just assume that cloud ticks all the boxes from a security perspective. Organisations need to be clear on their own tolerance for risk and have this agreed at the C-suite level.

There’s definitely a feeling of resilience, and therefore business confidence, which organisations have felt from using cloud services over the last few months but this can’t just be assumed. Only recently Google reported disruption to their Gmail, Drive and Meeting services across Europe and the Middle East.

As usages settle into the norm, organisations need to proactively manage their resilience and continuity plans so they know with confidence what their resilience model is. Cloud services do have outages, don’t typically guarantee 100% uptime, and may charge more for greater resilience guarantees, so be prepared.

Quick tips:

  • Read and question the information security details from the service provider
  • Consider data residency and ownership
  • Assess the business risks and your own organisation’s tolerance
  • Ensure full buy-in to the business risks with the C-suite
5. DON’T ASSUME A CLOUD SERVICE WILL RUN ITSELF

It would be rare to find a cloud service where you can subscribe and ignore. Service Lifecycle Management (SLM) brings to the fore the implications of managing the service over the life of usage. The implications on the technology operating model and the skills of the team can be very significant.

For example, managing Azure or AWS compute services requires a very different set of skills than managing your own physical servers. There is an upfront investment here in re-skilling and re-tooling the team that the cloud service providers are not necessarily forthcoming about. This effort should not be underestimated and gets even more complex in a multi-vendor IaaS environment.

Another key consideration for the SLM is the impact of making enhancements to a SaaS solution. This can have significant implications on the cost and upgrade processes for the service. The service provider may well have a methodology for allowing such enhancements and may even subtly encourage them, but the implications on upgrade process and cycle need to be weighed up against the business benefits of such enhancements.

Quick tips:

  • Fact find SLM implications for the cloud service
  • Consider upfront implications on skills, tools and processes
  • Set-up changes to operating model ready for service adoption
6. READY TO PURCHASE?

A username, password and a credit card will get you access to many cloud services but this ease of subscription should not stop you carrying out the appropriate level of due diligence for the service before buying it. Clearly the level and importance of usage to the organisation will influence the type of due diligence but at its most basic you should check the following:

  • the terms and conditions
  • the data privacy statement for usage and location of data
  • the service levels and recovery commitment
  • the pricing options based on service and scale

The type of service and wider usage opportunities in the organisation should be considered at the outset, not necessarily to stop the usage or stop a pilot but to ensure you are aware of the wider organisational context before signing up.

Quick Tips:

  • Read the terms and conditions
  • Pay attention to wider usage and contract implications
  • Negotiate!
CONCLUSION

The adoption of cloud services has brought huge upsides for many organisations over the last few months and rightly brought the benefits to the boardroom table. In reality this momentum had been there long before the pandemic struck, but now it comes with a greater push from both vendors and the C-suite.

There’s no doubt that as organisations learn from this and ramp up digital transformation plans to reflect their new operating requirements, cloud services really can be classified as the silver lining to delivering digital transformation. However, transformation history shows us that technology alone will not bring successful business change – the purpose of this article, is to show that there are wider considerations for selecting a cloud service than just ‘click and run’.

Download the PDF copy of this paper here