Tuesday, March 15, 2016

How to Make Clear Business Case Justification for “Pushing Cloud Envelope”

Cloud is not only about the technology, more crucially about a digital management philosophy and methodology.

Cloud adoption is happening at a fantastic rate of knots and is impacting both at business and individual level, more and more CIOs are crafting their cloud strategy. Before pushing their ‘cloud envelope’ further, understanding the clear business goals is first things first to watch over the cloud, and well-planning is half way to success. More specifically, what are clear business case justifications to make cloud adoption not “cloudy”?

Focus on delivering business values. “Cloud” has been proven to bring visible benefits such as faster delivery or CapEx-OpEx transformation, etc, and many organizations have already reaped the benefit from the SAAS model.  There are obvious benefits that can be obtained, however, there are also important costs that businesses need to assume which might not be so obvious (transformation, integration, agility). You need to dig deep and understand all aspects of how your business will use and benefit or interact with the cloud solutions, and you have to weigh initial investment costs against the other benefits such as flexibility, long-term savings, feasibility, employee productivity and customer satisfaction.  Cloud is applicable to the pay as you use services. it allows to not oversize necessarily to be covered "just in case.” Cloud OpEx model provides flexibility to improve IT cash flow and allows IT to make a value-driven investment in order to catalyze business growth and innovation. It would be great if IT could tie investments directly to the business value. What impact does an IT project, such as cloud-based solution, have on revenue if you could come to market six months earlier than the competition? How much did you save in overhead by an IT project that yielded optimized processes? Pay more attention to the pitfalls when you only focus on the one-dimensional benefit of Cloud. For example, if you only demonstrate "hard" cost savings by using cloud services, it might be tempting to pigeonhole them as good ROI for the IT department and its budget, rather than as something that delivers "business value." But doing so would be limiting the concept of business value to only those things that deliver increased revenues, make customers happier, etc.

Business agility: Agility is the more common goal driving enterprises to the Cloud. The business side wants to take its ideas, put them up fast and quick and get what they want- fast! The implicit statement is IT currently does not do that. Cloud Computing by itself is not the answer. It comes down to how your organization will rethink how it offers IT services to achieve business agility. There are several ways in an appropriately designed cloud environment can bring speed, efficiency and agility to organizations:
-Always on: Explore the always on, always connected digital working environment; expand your workforce to any location; shows a desire for a "new" delivery model by the business, a dissatisfaction with the status quo.
-Scale Up: Scale capacity quickly up or down, and cost-effectively with the Cloud. There are some significant advantages that make utilizing hardware more efficient, the ability to scale up or down as demand waxes and wanes among them. But that doesn't necessarily equate to faster software development or better quality of software.  

Focus on innovation:  Cloud is based on the philosophy that focuses on your business, and most value-driven business activities, to harness IT innovation. The mindset between running IT on-premise vs. in the cloud is definitely different, CIOs & senior IT management need to anticipate and manage the "change management" aspect of the transition. The trend to the cloud is shaping the new mindset to run IT and business in a continuous improvement and delivery mode. If technology trend like cloud can be used to shorten that cycle, one would think that a corporation would be in better position to compete and thrive. And IT has a better opportunity to run as a business's innovation engine, spend more resource upon how to cultivate the set of unique business capability to gain a competitive advantage for business. You still must have a strong technical staff. The only difference is that they will now focus on tuning business processes/capabilities and other high-end arenas to improve IT maturity and differentiate the business. IT can provide optimized structure and framework to streamline processes and enable innovation. Think transparent,  flat, and collaborative. Creative companies have set up processes for drawing ideas out of business units, often using cloud-based, online platforms to encourage corporate-wide, crowd-sourced innovation idea generation.

Embracing cloud journey is a must to do item on IT transformation agenda. It is inevitable that you will end up with a hybrid cloud environment for your applications and solutions. Moving up to the cloud is neither for cost saving only nor about catching the IT fashion, it is a journey to reinvent IT via modernization, classification, integration, optimization, and innovation. It is an opportunity to improve IT agility and increase IT maturity, make well preparation and  clear business case justification, avoid potential pitfalls. Cloud is not only about the technology, more crucially about a digital management philosophy and methodology.


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