cloud adoption strategy#
Define and document your motivations: Meet with key stakeholders and executives to document the motivations behind cloud adoption.
Document business outcomes: Engage motivated stakeholders and executives to document specific business outcomes.
Develop a business case: Develop a business case to validate the financial model that supports your motivations and outcomes.
Choose the right first project: Your first cloud adoption project will help align motivations with technical effort. This article can help you choose your first project wisely.
Motivation-driven strategies#
Business transformations that are supported by cloud adoption can be driven by various motivations.
Migration#
- Cost savings.
- Reduction in vendor or technical complexity.
- Optimization of internal operations.
- Increasing business agility.
- Preparing for new technical capabilities.
- Scaling to meet market demands.
- Scaling to meet geographic demands.
Innovation#
- Increasing business agility.
- Preparing for new technical capabilities.
- Building new technical capabilities.
- Scaling to meet market demands.
- Scaling to meet geographic demands.
- Improving customer experiences and engagements.
- Transforming products or services.
Business Outcomes#
Fiscal outcomes -Financial or fiscal performance is the cleanest business outcome for many business leaders, but not the only one.
Agility outcomes - Today’s fast-changing business environment places a premium on time. The ability to respond to and drive market change quickly is the fundamental measure of business agility.
Reach outcomes - In a constantly shrinking market, global reach (ability to support global customers and users) can be measured by compliance in geographies that are relevant to the business.
Customer engagement outcomes - Social marketplaces are redefining winners and losers at an unheard-of pace. Responding to user needs is a key measure of customer engagement.
Performance outcomes - Performance and reliability are assumed. When either falters, reputation damage can be painful and long-lasting.
Business Justification#
On a basic level, the business justification focuses on the return on investment (ROI) associated with the proposed technical change. The generic formula for ROI is:
ROI (Return of Investment) = (Gain from Investment - Investment) / Investment
When the ROI is below 20%, consider a digital estate planning exercise, paying specific attention to rationalization.
Calculating the gain from investment often requires a second formula that’s specific to the business outcomes and associated technical changes. Calculating earnings is harder than calculating cost reductions.
Gain from Investment = Revenue deltas - Cost deltas
Revenue deltas#
Revenue deltas should be forecast in partnership with business stakeholders.
Cost deltas#
Cost deltas are the amount of increase or decrease that will be caused by the transformation.