When dealing day-to-day with clients regarding cloud initiatives, KPMG Director Corey Jacobson says he sees some that “chase the value” of cloud — that is, run after their dream of a successful transition to cloud technology without a smooth, well-thought-out strategy.
“They often approach it with a siloed mindset or a fragmented manner,” he explains. The business unit might buy a SaaS service, for example, or the infrastructure team might start migrating components to the cloud. But progress isn’t properly tracked and it is unclear whether value was gained overall. “They may promise more effectiveness and efficiency, but don’t really measure it,” he says.
Running down the cloud dream, in fact, is simply no longer enough. As cloud becomes a critical strategic component for CIOs and the business function, particularly in larger companies, it has become an enabler of disruptive business technology as well as a disruptor to traditional IT — and it is up to the CIO to handle those disruptions and lead the company smoothly into its cloud future. “The cloud ecosystem keeps evolving and scaling rapidly, and organizations need to be able to respond to accelerations across digital transformations,” says Jacobson.
However, implementing cloud services and getting value from it is not necessarily one and the same, for several reasons: The diversity of legacy environments; the technical debt accumulated over years; and the growing number of cloud services and delivery options to consider — which create levels of complexity in decision-making and in implementation. “At times it’s challenging at best,” adds Jacobson, but at worst, “it becomes a barrier to getting to the cloud.”
That’s where an enterprise cloud strategy and appropriate business case comes in, striking a balance between business priorities and IT supply. At a minimum, the right strategy will address when it’s appropriate to use public or private clouds; the use cases for different cloud delivery models; when to use on-premise/off-premise; where different data classifications can be stored and accessed; and which cloud providers and services are acceptable. In addition, strategic decisions must be made surrounding processing and procuring cloud-based solutions, how it will impact the budget and how migration and ongoing deployment of cloud services will occur.
There are four key elements to building a successful cloud strategy, Jacobson explains:
1. Clear guiding principles through the journey. If you don’t have these principles to guide business and IT stakeholders, it delays time to value, says Jacobson: “It causes confusion and missed expectations.
2. A cloud suitability assessment. The organization must assess whether existing applications or workloads can move to the cloud and can perform at least at the level they are performing today, if not better. They should address risk appetites, objectives and the organization’s specific needs — while avoiding “paralysis by analysis.” “You need to understand just enough to determine whether it can go to the cloud,” says Jacobson.
3. Review and update of technology architecture. The IT organization needs to look at the company’s technology stacks and factor in cloud service and deployment models. Which part of the stacks will cloud play? Then, it needs to look at the operational tools required to run those cloud services, along with self-service and automation of activities like provisioning. Other layers include identity/security tools to federate the company’s security framework, or even hybrid environments where some legacy systems are still on-prem and a framework is extended out to the cloud. Finally, a unified service management capability is needed that works across all various cloud providers.
4. Assessment for continuous delivery and DevOps. As the business plays a bigger role and wants more control over what services they want to consume and how they want to consume them in the cloud, IT must shift gears, says Jacobson: “For IT, it’s about switching from being a cost and support center to being a broker of cloud services, integrator of cloud services and orchestrator of those services.”
Next, a solid migration plan to implement the cloud strategy is needed: The organization has to assess its portfolios and workloads to determine whether are they suitable for cloud; what dependencies they have on each other; the costs of running applications and workloads and what level of effort is required to move them to the cloud. There are several challenges the organization faces in doing this:
Executive and stakeholder support. Everythingfrom costs to agility and flexibility need to be put in business terms with executives and stakeholders, says Jacobson. “You have to communicate what they actually get out of this,” he says. “Is this giving them faster time to market? Can they put more widgets through machines so they have more demand met?”
Evolving the ecosystems and support model. As IT becomes the integrator and orchestrator, it has to stay ahead of the game — understanding provider trends and becoming a trusted advisor to the business. “It’s not just about seeing the demand, but figuring out how to meet that demand and becoming more effective in meeting it,” Jacobson explains. “It’s about being more proactive and working hand-in-hand with the business.”
Understanding the risks. New risks are not always understood, especially around security and compliance — such as, what data can go in cloud? How secure can it be and how will it remain compliant? “At the same time,” says Jacobson, “IT organizations have to consider how they extend their user, partner and customer identities in the cloud?
Overall impact. The CIO needs to be prepared to handle organizational, architectural and operational impacts of the cloud, particularly with self-service and higher levels of automation. “Getting away from staff doing lower-level repeatable tasks, and focusing on higher-value tasks is a major shift for some of the IT managers and staff,” Jacobson explains.
With the challenges of moving to the cloud often come some mistakes, he adds. A common one is not looking at how the move to cloud changes cost structure. “With cloud, the organization is transitioning to an OPEX model coupled with dynamic pricing and consumption, with more rigor around forecasting and budgeting,” he explains. In addition, organizations have to look at how they integrate applications among various cloud providers. “You may have a cluster of three or four apps that have to talk to each other — two housed on one cloud provider and two housed on another, but the ‘application chattiness’ between them either causes performance issues or there are unexpected costs because the network egress from each one may result in additional network costs more,” he says.
To make the dream of succeeding in the cloud a reality, developing new skills is also key, with an operating model in which IT is essentially flipped on its head. The organization has to develop skills not so much around building and deploying technologies, but brokering multiple technologies — almost like a real estate broker’s services or integrating and orchestrating multiple technologies a like general contractor building a house.
“The business is looking to buy a service and you have access to all the providers that are providing that service to the organization — and you’re the one helping the business decide the best to use,” says Jacobson. “You need to help the business get what it wants and then help clear the path to a successful outcome that delivers value.”
To learn more about the Journey to the Cloud, access the full paper and explore KPMG’s related content.