In 2020, a certain life insurance company began its cloud transformation, quickly migrating applications and building new ones on the cloud. The company launched a cloud-native platform in 2021, which went on to win an award.
Later that same year, it put its cloud migration on hold, citing issues with its lift-and-shift that kept sending the program over budget.
This is a familiar story. Many cloud transformations fail to deliver the intended results on the first attempt. Executives recognize that the cloud holds tremendous potential for their businesses, and over the past several years they’ve made significant investments in enterprise cloud transformations. But what hinders so many of these efforts is a lack of alignment between business strategy and cloud strategy.
While many businesses look to migrate to the cloud as a way to cut costs, that ambition is not enough to carry them through the challenges of a large-scale cloud transformation. Businesses need to go deeper.
What are the changes that will help the organization cut costs or increase efficiency, and is the cloud the best technology to support those changes? What changes need to be made to support a cloud migration? What kind of impact will a move like that have on the organization?
To be truly successful in their cloud migrations, businesses need to take a more proactive, business-driven approach to technology. This begins with identifying the business challenges they want to address and developing a technology strategy that will do just that.
Cloud Transformation As Business Transformation
Cloud strategy and business strategy are becoming synonymous. Today’s business challenges are going to be solved by a technology underpinning. AI and machine learning can help process huge volumes of customer data and generate insights that can be used to improve operations or customer experience. The cloud can increase the scalability of data stores and make them more accessible.
Technology holds the key to many business challenges. But like any good business solution, technology—especially the cloud—needs to be implemented strategically to avoid unexpected risks down the line.
It’s common for businesses to embark on their cloud migrations only to find out too late that certain applications are impossible or too complicated to move, leading to delays, costs, inefficiencies and even risks. These could all be avoided with greater upfront planning and a more business-driven technology strategy.
Similarly, if a business only approaches cloud migration from a technology perspective—if the CIO is involved but not the CFO or business managers—the migration is likely to hit a wall.
Because moving to the cloud is a journey, not a destination, it must always include organizational change management to align business goals, priorities and calendars with technology capabilities and implications. What does the business need? What do the business managers want, and what kind of support will they need throughout the transition?
If business owners do not feel supported in the transition, and if the move to the cloud is more trouble for them than it’s worth, they may stay where they are and progress will stall.
Developing A Proactive, Business-Driven Cloud Strategy
So how do business leaders anticipate and address these challenges? To start, they need to align on the strategic priorities for the business—increased resiliency and agility, for example, or more data-driven operations. The cloud can bring tremendous value to a business, and it can do so in many different ways. The key is to identify the specific value and the specific applications that will be most helpful to the business in achieving its goals.
Consider a business that is interested in becoming future-ready—more adaptable, resilient, agile and efficient. The cloud can help achieve these ambitions by offering as-a-service models that lower capex and refocus opex.
Data center management can be outsourced to cloud service providers (CSPs), increasing security monitoring and infrastructure management while bringing IT teams closer to the business for increased attention to and efficiency of internal business operations. Meanwhile, the business is only spending money on the services it uses and is suddenly able to scale up and down as needed without investing in physical data centers, reducing technical debt and carbon footprint.
This scenario may seem similar to investing in the cloud as a way to cut costs, but the difference is critical: The scenario above offers guidance for how to best implement the cloud throughout the organization, while a strictly cost-focused scenario does not. By focusing on future-proofing operations, the business has a road map for its business and technology program.
Teams can start assessing what operations are most critical to moving to the cloud and what it will take to do so, then develop a phased approach, making incremental changes to reduce disruptions to the business while increasing ROI.
This return on investment might be cost reductions, or it might be increased efficiency or user experience. Business leaders can define what value means in that moment and at various stages throughout the cloud migration to be sure they stay on track while adapting to new challenges as the migration progresses.
Infrastructure changes cannot happen in a vacuum. To be successful, organizations need to consider the bigger picture—the long-term goals, the potential challenges and what it will take to address them.
After pausing its cloud transformation, the insurance company spent another year revising its cloud migration strategy to one that is now almost indistinguishable from its business strategy. The company is using business outcomes to guide its modernization, ensuring that the cloud migration adheres to the company’s business principles and that the workforce is supported throughout the transformation with necessary training.
This kind of holistic approach will require more time and commitment to implement, but the payoff will likely be more significant and sustainable. By approaching cloud adoption from a business perspective and by taking a proactive approach that is guided by business ambitions and organizational change management, organizations can lead more successful cloud transformations that go well beyond expectations.