Don't let the cloud get stuck on the ground

Migrating on-premise data centers on the cloud may turn out to be an approval-intensive task, primarily for large organizations that have several lines of business (LOB). For each business line at least three approvals are required per application: the first one is from the business leader, the second is from the finance department, and the third is from the application development and maintenance team (ADM). Add a couple of more approvals from the compliance and legal side for LOBs that work in highly regulated industries such as healthcare and banking & finance.

Unfortunately, for many enterprises, these approvals do not come for months, if they come at all, even after rigorous follow-up. Surprisingly enough the key reason behind this is not the technicalities involved but rather the lack of clarity. For example, for some approvers like operating leaders, the business case for the cloud transformation does not make sense, primarily when infrastructure management & operations (IO) leaders try to sell the cloud migration with the "lift and shift" theme. Similarly, other approvers like finance leaders, are also confused about how the cloud will impact their books and of course their PnL.

Therefore, to successfully (and indeed timely too) navigate the complex maze of functional approvals, enterprises should do the following at the bare minimum.

Talk about the disadvantages

The cloud strategy brings numerous advantages, and precisely that's the reason technical leaders could sell it to the executive committee. But before approving its implementation in their LOBs respective leaders want to know what are the disadvantages. Unfortunately, not many business cases talk about those and this is where the technical team starts losing credibility to LOB leaders and approvals start going down to the rabbit hole.

Thus, in addition to the glossy picture of the cloud, it's better to include its key disadvantages or gray areas while seeking approvals. The following are some of them.

• Spot pricing may turn to surge pricing. If cloud providers are oversubscribed, then the prices may favor those who can afford it
• There are scenarios where the cloud can get disproportionately expensive compared to maintaining on-premises infrastructure
• Unlike on-premises applications, which are depreciable assets over time, the increase in the operating budget from the cloud never lessens
• The easy availability of software and/or infrastructure via the cloud allows more applications (redundant) to come into the organization - applications that need to be supported, integrated, and so on. As a result, more technical debt would get accumulated
• While the cloud is secure, the security within the cloud is still the migration team responsibility and any single mistake may lead to data breach and/or privacy issues 

While the majority of these pointers can be used generically, they would leave a better impression if customized per LOB and/or application as per their unique needs.

Clarify the impact on the existing cost structure

A lot of work goes into deciding whether a company will prefer capital expenditures over operational. CAPEX, for example, boosts the income statement and makes the balance sheet healthier in financial terms. As a result, capital expenditure attracts investors and business loaners.

So, for enterprises that are strategizing their growth purely based on investors' or business loaners' money, convincing their finance leaders not to go on CAPEX might turn out to be a nightmare. The worse, as worst as face a return to on-premises, can happen if they find out later that cloud transformation shifted their expenses from the capital to operational.

It is, therefore, better to publish some information about how the cloud will change the existing cost structure - don't assume that the finance would know it all. Highlight the points below at every possible opportunity.

• The cloud transformation shifts expenses from the capital to operational, thus they need to be recognized differently for financial purposes
• Most cloud-based applications cannot be counted as assets on a balance sheet hence no depreciation and/or amortization
• “Pay-as-you-use” or “Pay-as-you-go” model restricts committing to any concrete number for budgeting purposes. Moreover, as noted earlier too, unlike on-premises applications, which are depreciable assets over time, the increase in the operating budget from the cloud never lessens

Be super cautious while developing the business cases for legacy portfolios where existing on-prem infra is already fully depreciated in the books, and in finance eyes, there are no costs involved to keep running it except regular maintenance costs.

Analyze client contracts

Enterprises usually find themselves in situations where clients' contracts or industries' regulations prevent data from being held physically outside the company. While companies can try to renegotiate clients' contracts during the renewal time, influencing industries' regulations are next to impossible. It is, therefore, wise to scan all clients' contracts and their industries' regulations before requesting LOBs leaders ' approvals.

The cloud migration business case should clearly say something like this " As per the contract, the cloud migration for this client is allowed and industry regulations also don't restrict in doing so".

A quick scan of the contracts database will also help in setting up realistic expectations among the project's sponsors - it is highly unlikely that a diverse company can achieve a 100% on the cloud vision, at least not for another five (5) years from the start of the cloud adoption journey.

Add business value proposition

The cloud's value proposition comes very clear on technical aspects such as greater flexibility, superior scalability, and improved disaster recovery. But business leaders want to know what is there for them. Thus, explicitly include something that business leaders might care about, perhaps the advantages of the cloud ecosystem as a whole and of course in a customized way for each application. The following are some of such advantages.

• The ability to quickly launch the mobile app for a legacy application
• Faster (and less-expensive) implementations
• Greater returns on investment (ROIs) within a shorter operating timeframe
• Easy integration with AI products and services
• Possibility to introduce new revenue streams like data monetization

Never sell the lift and shift approach

One of the most common mistakes companies make is proposing their applications run in the cloud the same way they did on-premises. This approach defeats some, if not the whole purpose of the cloud transformation. On-prem apps, for instance, are used to consume resources at peak whereas the cloud is designed to use resources when they are required and give them back when they aren't. So, rearchitecting the applications is absolutely required to fully optimize the total cost of ownership (TCO).

Also, don't forget to consider the application support model while rearchitecting on-prem applications. In particular, the extended hours' support arrangements were initially made due to limited computing resources on the production servers. Application support teams, for example, are often staffed to do resources intensive backend jobs like exporting/importing batch data during non-production hours. But after the cloud that might not be a requirement any longer and enterprises can save a decent amount of money by just reducing their support hours. This saving can be pretty well packaged in the business value proposition of the cloud transformation and will eventually help in speeding up the approvals from LOBs' leaders.

Publish FAQs

In the entire approval cycle, a lot of questions come in the IO leaders' way from the approvers. Some of such questions are:

• What would happen if the internet is either slow or down?
• Do we still need the DR setups?
• Who is legally responsible for any data or privacy breach?
• How much capacity have reserved to adjust for the increase?
• How long the prices are locked?
• How the backups would happen and can the backup restore individual records or files, or does it just overwrite the entire application dataset?
• Who else from the cloud side will have the access to our machines or data?
• How the downtime will be communicated to us?
• How soon cloud service providers can resolve our issues?
• What would be our responsibilities if one of the cloud servers' crashes?
• How often the hardware replacement and software up-gradation would be done?

Responding to such questions individually is a time-consuming job and eventually slows down the approval process. Enterprises, therefore, should ensure that subscription purchase is well understood among all approvers and is not limited to IO leaders only. To do so, FAQs might be helpful and organizations should make them widely available.

In sum, keeping technical difficulties aside, a significant delay may occur in just procuring LOB leaders' approval to take their applications from the ground to the cloud. As a result, cloud migrations often take longer than expected, or they fail completely, resulting in wasted time and expense. This illustrates cloud transformation is not just an IT issue it’s also a business issue. So, enterprises must devise some kind of mechanisms or strategies to break the almost unbreakable spider web of functional approvals.

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Send me your thoughts, questions, observations, and predictions by hitting "Add a comment" to this post. Differing perspectives are always welcome do not hesitate in posting them as well.

Thank you for reading my post. I regularly write about the newest digital technologies and digital transformation initiatives. To read my future posts simply click 'Follow'. Feel free to connect with me as well.

Also, you might like to read more about cutting-edge digital technologies in Artificial Intelligence: The Star of the Digital Galaxy: A study of Digital Disruption, Innovation, and Economic Transformation. It's packed with real-life examples and intended to serve as a primer to simplify and explain the concepts, implementations, and implications of the AI-powered digital galaxy.

About Amit Asawa

Amit Asawa is a strategic business & digital technologies practitioner and advisor. He helps enterprises improve their business performance by seeking, evaluating, and implementing technological advancements. He has extensive experience in IT implementations, digital optimizations, transformations, and modernizations including systems integration, business process re-engineering, and organizational change management.

Note: This is the author's personal opinion. This content has not been read or approved by a current or former employer before it is posted, and does not represent their positions, strategies, or opinions.