Cloud First - Are we there yet?

Scott Fenton, Former CIO, Wind River & Executive Consultant-IT, Scott Fenton Consulting, LLC
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In speaking with a number of companies, I am surprised at how many have not adopted a Cloud First strategy. In many cases, I find the organization either does not understand the benefits, both business and financial, or are simply risk averse. These can range from a fear of losing control of your applications and data, to losing your staff. I totally understand their concern. Disruption to your business applications and platform could have devastating consequences.

On the flip side however, the benefits far outweigh the risks. As a CIO, I had not purchased an on premise application in years, only Cloud solutions. Below, I have outlined five benefits of a Cloud First strategy, and five pitfalls to avoid.

Benefits:

1. Beating the Competition – Many small to mid-sized companies cannot afford an expensive on premise application, and all the hardware support, and staff required to install and maintain it. In my experience, it was not uncommon to see on premise implementations of this nature take 6-12 months and cost several million dollars.

 Allocating experienced resources to ensure your Cloud deployment is a success will pay huge dividends for years to come 

This is all avoided by deploying a Cloud First strategy. The application is already built, and hosted by a provider on a stable and secure hardware platform. If you are a smaller company with limited technology funds for systems, going to the Cloud allows you to compete with other larger organizations in record time, at a fraction of the cost. Using this pay-as-you-go model allows you to strategically allocate the corporate savings to other parts of your business.

2. Seamless and Painless Software Upgrades – You’ve seen it before; we need to upgrade our applications hence embark on a 6-12 month financially and emotionally draining project. Not to mention the business disruptions. Why would you want to do this? With Cloud applications, the provider assumes the burden for all of this. In most cases, your upgrade will happen seamlessly on a weekend and take a couple of hours, to perhaps a day. Doing this frees you to focus on your business, not your systems.

3. No Capital Investment – Current accounting standards classify cloud computing as an expense, not a capital investment. Why expend large amounts of valuable corporate capital up front vs. expensing as you go. Those capital funds could be better used for investments in buildings, plant and equipment, and other assets.

4. Reduced People Costs – One of the most misunderstood notions of Cloud computing is that all of your I.T. staff are obsolete. Having deployed Cloud applications in several companies, I can tell you this is simply not the case, however some functions may be reduced or eliminated, usually on the Operations/Infrastructure side. The professionals who manage your I.T. applications are still required, however their responsibilities will change and they will need to retool for the new Cloud application. The key skills regarding the understanding of business, technology, and innovation, flourish in a Cloud environment. Staff are focused on the business, not the computing platform.

5. Flexibility – You may have heard stories of the most incredible successful Cloud company Amazon Web Services where with one phone call, in minutes they provide world class computing services, platforms, and applications. The same is true for Cloud applications providers like Salesforce.com, Oracle, and others. If the business need for more application functionality or computing resources grows, getting from here to there is dramatically simplified in terms of time and resources. Imagine rolling out new sales, marketing, or financial functionality in weeks or a few months vs. years. This flexibility is a tremendous asset when your organization is growing at sometimes an unpredictable rate. Yes it’s true, time is money.

Pitfalls:

1. Poor Planning of your Cloud Deployment – There is a common misconception that simply purchasing a Cloud solution will solve all of your problems in a day. The truth is, the same amount of business planning is required whether you are deploying an on premise application or a Cloud solution. The up-front work still needs to be done. Key questions about why are you going with this solution, how will the business benefit, how to port legacy data over to the new platform, and how will the business/operations work in this new environment, all have to be carefully addressed with heavy involvement from the business.

2. Getting Executive Buy-in – If you don’t have it, stop everything and go home. Grass roots efforts to change the world can be popular, but if the senior executive team at your company does not support the endeavor, failure is guaranteed. Not only should you have executive buy-in, you need an executive sponsor. This display of leadership and support will be critical to your success, and it shows the rest of the company they are committed.

3. Painting a rosy picture of Cost Savings – Of course we all want to save precious corporate resources. Seeing the “monthly” cost per license for a single seat of software can be mesmerizing. A complete financial analysis of the cost of deployment is recommended to see the full picture of a Cloud project. The total number of users, additional modules and functionality, support contracts, third party tools required, new skills training—these all need to be considered as part of the total cost and Return on Investment.

4. Big-Bang Implementation – Avoid this at all costs. This approach has you deploying the complete solution to your entire company all at once while retiring your old system same day. At times, this approach is unavoidable but in most cases a phased approach is much better and stands a greater chance of success. As I like to say, “You have to crawl, before you walk, before you run”.

5. Bring in an Implementation Partner – Simply put, don’t try this by yourself. Even the smallest Cloud deployment will benefit from experienced partners who have done this before. Why spend valuable time, resources, and take additional risks to recreate the wheel. Allocating experienced resources to ensure your Cloud deployment is a success will pay huge dividends for years to come. If you fail, getting a second chance is unlikely.

Conclusion:

Many companies have steered through this obstacle course called Cloud computing with enormous success. Conceptually, it’s not that difficult. That said, the devil is in the details. There are tremendous benefits of adopting a Cloud First strategy. If you have yet to start one, or plan to increase your cloud footprint, I hope you found this article beneficial.

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