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By Lynette Seah, CEO and Founder, Alpha7
Enterprises in Asia are embracing cloud models to drive digital transformation and business innovation. Moving new or existing applications to the cloud is,however, a complex process.It requires long-term strategic planning and a sound understanding of the many challenges that can confront an organisation.
The old way of defining the value of cloud computing through cost efficiencies and capital expense avoidance is falling out of favour. Nonetheless, determining the true return on investment (ROI) of cloud computing is not a simple modelling exercise. Understanding and calculating the business value of cloud computing — public, private or hybrid — requires a complex and dynamic analysis that is unique to the problem you’re trying to address.
Before starting on the journey, as with all business decisions, it’s a matter of identifying important business processes and analysing the impact that any change can have on them.
Specific to the cloud journey, it includes understanding the challenges when integrating existing applications and data across cloud platforms; defining the value of cloud models;creating metrics to measure return on investment (ROI); deciding which work loads and applications to deploy in the cloud; and defining processes formigrating them.
With this in mind, I’ve set out a few key questions business owners, IT leaders and C-Suites must ask themselves before embarking on their cloud journey. While execution is important in digital transformation, so is planning.
Key Questions in the digital transformation journey
First: Consider existing investments in IT infrastructure to identify where outsourcing to the cloud makes sense. What should be replaced and how much can be saved? In some cases, sunk costs will simply be too high to outsource those resources to the cloud in the immediate future. The long-term savings may not make sense if the company has to write-off a large recent investment.
Second: How much will this cost and how disruptive will it be?Consider staff changes and skillsets, and project the impact cloud-based resources will have on your team, i.e. updating your existing staff with cloud skills.
Third: To what extent is agility and time-to-market a value attribute to your business? This is typically where the ROI can be found. If you’re a high-tech company, then time-to-market and agility advantages are typically prioritised. If you’re a paper plant that has not changed the product or business processes in 20 years, then neither likely holds much worth.
Finally: What costs will be associated with improving security and governance? These costs can be as much as 30 per cent to 40 per cent of the final cloud resource deployment costs, and will certainly drivenew training and staff costs.
Digital transformation is a significant business challenge, but also a tremendous opportunity. Organisations that embrace change can transform their business models to compete successfully in a rapidly changing world. Companies that fail to move quickly run the risk of falling behind their competition.
By deploying cloud computing models, organisations can be much more agile and cost efficient in driving a successful digital transformation strategy. But doing so requires a clear understanding of the challenges involved and the steps the organisation must take to overcome them.