Cloud continues to be a game-changer for organizations — increasing business agility, boosting flexibility and improving performance. According to the 2015 IDG Enterprise Cloud Computing Study, 25 percent of total IT budgets will be allocated to cloud computing in 2016.
And investment in cloud is growing, with 31 percent investing significantly in SaaS today and 49 percent expecting to do so over the next three years, according to the 2016 Harvey Nash/KPMG CIO survey The Creative CIO. But there are challenges to cloud adoption and optimization, including issues of adopting at scale; demonstrating the business value of cloud adoption; ensuring compliance and dealing with data issues; and avoiding vendor lock-in.
It’s important to understand the two different types of cloud adoptions that are happening, says Pierre Champigneulle, partner at KPMG. One type is driven by the business and is really about building new, transformative business capabilities such as IoT, data and analytics or business automation. Here, the cloud is an enabler, and the adoption is driven by the business, and the business may, or not, turn to IT to deploy, integrate and operate the new cloud environment.
“Depending on the maturity of IT in the organization, the more innovative CIOs will help the business more proactively,” he says.
The second type of cloud adoption focuses on optimizing the legacy environments within IT. Here, the CIO looks at using the cloud as a way to either be more prepared to address business-driven cloud adoption or address cost, performance or risk issues within IT itself.
“These two cloud adoption scenarios are occurring in parallel, not one after the other,” Champigneulle emphasizes. Most organizations have use cases in each scenario happening, he explains, which creates complexity but also synergies.
In all cases, cloud adoption is accelerating, he adds. “In our experience working with CIOs and the businesses they serve, the demand and number of requests for assistance with cloud adoption is growing rapidly,” he says. As cloud adoption increases, there is also rising pressure from the CFO to optimize IT cost and how it is financially handled and from risk officers to address security and compliance concerns. “So there is both acceleration and an increased number of challenges,” he adds.
Top challenges of cloud adoption
Within the IT organization itself, cloud adoption challenges tend to fall into the following three categories:
Technology: As cloud is adopted, “there are complex issues about how to integrate the cloud and legacy environments, at different levels of the technology stack and cloud services.” says Champigneulle. In addition,”IT must adapt and put in place the necessary tools to manage the new hybrid environment, including security requirements,” he says.
People: The IT organization will likely move toward a more agile approach as cloud is adopted, and some existing personnel will lack experience in consuming and operating technology as a service, says Champigneulle. “The CIO needs to transform their existing capabilities and operating model to enable a cloud enabled agile approach by bringing application and infrastructure closer.”
Process: With the cloud, the IT organization needs to adapt its processes, which become more focused around integrating services coming from multiple service providers and the legacy environment and delivering an innovative set of services to the business. “For example, IT needs to be able to move workloads from one service provider to another to take advantage of price evolutions and adjust the capacity to the demand on a continuous basis,” says Champigneulle.
For successful cloud adoption, get closer to the business
Beyond optimizing the IT organization to take advantage of the cloud, the biggest challenge for IT is to participate early in cloud enabled business transformations. IT needs to be able to communicate with the business about how the cloud can support their needs and position itself to implement a broad range of cloud solutions. In addition, the CIO has to address pressure from the CFO to demonstrate and drive value from the cloud while facing objections, or lack of cloud understanding, from security and regulatory stakeholders.
Champigneulle recommends being proactive with all the business entities the CIO works with, so that IT can influence and prepare for the transformations coming down the pike. “CIOs should reach out to the chief regulatory and security officers to educate them about the cloud, so they become more comfortable about the controls needed to address security and compliance requirements,” he says. The IT organization should also work closely with vendor management and sourcing entities to better understand the various services available as well as pricing and contractual options.
Of course, the CIO also needs to work closely with his team: Within IT, a roadmap needs to be put in place related to cloud adoption; a business case for the transformation and a strategy that addresses both the legacy environment but also the ability to support the business with the business transformation.
“This strategy needs to be both comprehensive and realistic,” says Champigneulle. Once they have established the roadmap and business case, the organization can run some pilots and move into executing that strategy and adoption effort — which, of course, brings another set of challenges. “But one thing at a time,” he says.