The pressure is building to execute on cloud transformation as the cloud model becomes a C-level and board-level priority. But fast action can result in potholes on the road to the cloud model. This post outlines five common mistakes companies make in launching cloud initiatives. The next post will describe what needs to be in place to help you avoid these mistakes and their consequences.
#1: Seeing cloud transformation as a project, not a journey.
Executing cloud transformation as a series of one-off projects leads to incompatible silos of clouds, vendors, contracts, processes, security gaps, and more. And that can make the whole cloud transformation initiative backfire, resulting in MORE complexity, LESS agility, HIGHER costs, POOR experiences for customers and employees, and LOWER efficiency in core business processes.
#2: Incomplete strategy and business case.
There are many considerations in defining both the strategy and the business case, and overlooking key factors is all too easy to do. The time pressure can also be a factor as board members, shareholders, and cross-organizational business leaders demand fast results.
#3: Underestimating the skill requirements and cultural impact.
Cloud skills are scarce, and without a detailed plan to attract, hire, and retain top talent, the cloud transformation agenda will slow to a crawl. Equally important, it is easy to underestimate the impact the shift to a cloud operating model can have on existing employees. Without clear communication and collaboration among all stakeholders, cloud transformation plans can quickly be derailed.
#4: Lack of understanding of cloud economics.
Deploying applications and infrastructure in the cloud is financially efficient – if you know how to manage the savings levers and take a “design to cost” approach that allows you to optimize consumption, rightsize resources, and manage licensing and contractual obligations to your best advantage. However, understanding, implementing, and managing cloud economics effectively can be far more complicated than it appears on the surface. It is important to take a detailed look at key financial metrics and how you’ll track them as you create your cloud transformation strategy and execution plan.
#5: Failure to put the right metrics in place to measure success.
Some business leaders say they’ll know success when they see it. This approach does not work well in transitions to cloud operating models. Quantifying success metrics and monitoring them carefully leads to better outcomes. You’ll need to consider a wide range of variables in the execution phase, including (to name just a few):
- Revenue from new digital services
- Operational improvement
- Customer experience management
- Time to market for new products and services
- Service excellence
- User engagement
- Workforce productivity
- Cost optimization, including license rationalization
- Operating expenses and contributing margin
- Average time to deliver new services
- Percentage of processes automated/self-service
- Sustainability goals – reducing carbon emissions.
Knowing what goes wrong can provide useful insights into making better preparations for your cloud journey. In the next post, we’ll look at the keys to success.