Goals and Economics
Clearly define the business goals that you want to achieve with cloud adoption. Use the concept of cloud economics to understand the cost, benefits, and value of cloud adoption.
Goals: Defining Success Metrics
Business goals are success metrics. When creating your business goals, consider your organization's mission, the objectives for cloud adoption, and the potential obstacles that you need to overcome.
Your organization's mission and vision should be the guiding principle for your cloud adoption initiative. When you align your cloud adoption goals with your organization's overall strategic goals, it helps to drive sponsorship and engagement for the initiative. It's also important to understand current cloud market trends, drivers, and threats for competitiveness.
With the context of your organization's business strategy in place, the next step is to identify the value of moving to the cloud. Evaluate the reasons behind the move, define the goals that you want to accomplish, and identify the key performance indicators for success. The more specific you are, the easier it is for your organization to support the initiative, to evaluate progress, and to adjust its current operating model for success.
The final step to define your business goals is to analyze the challenges, blockers, and risks that you anticipate as part of your cloud adoption initiative. By including the potential difficulties as part of your strategic approach, it can help you identify the right stakeholders to involve and facilitate the solution process.
Use the following tables as a template to document your organization's overall business strategy, the value that your organization can achieve from moving to the cloud, and the potential obstacles that you need to address.
| Mission | Enter your organization's mission |
| Vision | Enter your organization's vision |
| Strategic goals | Enter your organization's strategic goals |
| Market trends, drivers, and threats | Enter the trends, drivers, and threats for your organization |
| Reasons |
Executive mandate General transformation Innovation Growth Data center exit Merger and acquisition Competitor innovation Support for a new business Other examples that apply to your organization |
| Goals |
Digital transformation Estate modernization Business growth Entrance to new markets Time to market Competitiveness Access to technology Lower operations and maintenance costs Greater cost efficiencies Budget and cost control Faster release of new products Data-driven transformation Other examples that apply to your organization |
| Key performance indicators (KPIs) |
Business growth value Reduction in time to market Percentage in savings Number of new products deployed Other examples that apply to your organization |
| Challenges |
Lack of confidence Technical debt and legacy systems Complexity Compliance and regulatory requirements Manageability Other examples that apply to your organization |
| Risks |
Security Data loss Data privacy Data sovereignty Service availability Performance Other examples that apply to your organization |
| Blockers |
Current technical architecture Compatibility Other examples that apply to your organization |
When you formally document and socialize the opportunities and challenges of moving to the cloud, you establish your cloud transformation as the basis for agility and innovation. Solid business goals, particularly when framed in the context of your organization's overall business strategy, help to focus your organization on future-oriented, value-adding activities.
Cloud Economics: The Value of Cloud Adoption
Cloud economics is a concept that can help your organization evaluate the costs, benefits, and underlying principles of the cloud. When you understand the finances of cloud computing, you can optimize the value of your cloud transformation.
For example, if your organization is migrating from traditional on-premises IT to a cloud environment, you must shift asset ownership and depreciation to an on-demand usage model. Licensing, commercial terms, and contracting terms also change when you move from on-premises IT to the cloud.
If your organization is already operating in the cloud, you must consider the economic impact of switching providers or adopting a multicloud strategy.
For cloud adoption to be successful, your organization should be fully aware of the changes, and plan to modernize processes related to acquisition, depreciation, and expenses. Documenting the financial value of cloud adoption helps your finance department to update processes from a traditional IT procurement model to a cloud consumption model, and helps the rest of your organization to quantify the value of cloud adoption.
Use the examples in the following table to identify and prioritize the key criteria from cloud economics that apply to your organization. These criteria help you to develop your business case for cloud adoption.
| Cloud Economics Principle | Examples |
|---|---|
| Business value of cloud adoption |
On-premises spending repurposed to cloud capability acquisition Operational costs shifted to innovation Remote work Business resilience Improved agility Operational resiliency Improved security Enhanced compliance |
| Financial improvements |
Financial flexibility Total cost of ownership (TCO) gains Pay As You Go options On-demand services Real-time transparency on cost control, usage, and allocation License reduction Support of business services Reduced facilities cost |
| Technical improvements |
Flexibility High availability Disaster recovery Security Compliance |
| Other considerations |
Variable IT cost Cloud optimization Scalability Capital expenses (CAPEX) shifted to operational expenses (OPEX) Asset depreciation |
A good practice during this stage is to define and implement IT showback or chargeback models for the business units that will use cloud computing resources. This can help to transition your IT department from a cost center to a value enabler.