Are you about to embark on a cloud transformation? Before you do, make sure you’re up to speed with these 5 common cloud transformation myths…
Myth No. 1
Moving what you’ve got into the Cloud = transformation job done
Look, I get it – migrating all your IT applications to the cloud as quickly as possible seems like an easy way to achieve the benefits of the cloud. However, if it’s transformation you’re seeking, then you’re going to want to look beyond simple migration.
Adopting a narrow focus on cloud transformation risks a wasted opportunity. It can also mean simply pushing work that needs to get done into the long grass. For example, migrating applications that would be better off being retired, or migrating applications ‘as-is’ without taking the opportunity to refactor them.
To refactor an application means to rewrite one or more components of it to take advantage of public cloud services. This can, for example, involve refactoring the traditional application a legacy 3-tier application design to granular, micro-services-based applications.
“Way back in 2010 Gartner explored five alternatives for how to respond to the directive: ‘Move some applications to the cloud.’ The alternatives explored are known as the 5R’s.”
What should you do?
Way back in 2010 Gartner explored five alternatives when responding to the directive: “Move some applications to the cloud.”
These alternatives, known as the 5R’s, are as follows:
- Retain – Do nothing and continue to host the application on-premise
- Retire – As the name suggests, retire the application from your portfolio
- Rehost/Re-platform – Migrate the application ‘as is’ or by making minimal change to allow migration to the cloud
- Repurchase – Replace and existing vendor application with a more modern or functionally richer version
- Refactor – Rewrite the application as ‘cloud native’ to maximise the benefits of migration to the cloud. This is likely the most expensive option but also the most strategic and the one most likely to drive maximum longer-term benefit.
I recommend you start your transformation journey with an audit of your current applications and services. Against each you can then determine which of the 5R’s is the right strategy.
How do you determine the most appropriate strategy? Well, that brings me on to myth number 2…
Myth No. 2
The IT team can transform your organization on its own
Migrating to the cloud is all about tech, right? So it’s an IT thing – nothing for the business to see here!
Of course, migrating to the cloud has an unmistakably large technology component to it. At its most basic, it’s about moving IT services from your data centre into someone else’s cloud. It obvious, therefore, why cloud transformation is often limited by the IT team.
However, as we explored in the first myth, the best place to start your cloud transformation journey is by auditing your current applications and services, then determining the best strategy for each (using the 5Rs model for guidance).
But how can the IT team determine what’s the right strategy by itself? It can’t.
What should you do?
Engage with the business. Form a programme team that includes a cross-section of business stakeholders, and that has sponsorship – or at the least, project board membership – at a senior business level.
If you don’t fully engage your business units in the transformation journey, you risk spending potentially millions on technology yet having the same state business operating environment. A less than ideal outcome and something the execs are less likely to fund in the first place.
Of course, cloud transformation isn’t exactly a low-cost undertaking, which brings me on to myth no. 3…
Myth No. 3
Cloud transformation is expensive and needs a BIG budget
Moving to the cloud is complex and can be a very expensive undertaking. The problem, however, with maintaining this view on costs is that your shift to the cloud keeps getting pushed back.
By failing to gain a better understanding of the business problems that you’re trying to solve – and the opportunities that you’re hoping to realise – the desired benefits never seem to stack up against the perceived costs. Instead, other projects keep being given priority and resources due to more rigorous and compelling cost benefit metrics.
What should you do?
You need to put the investment costs in the right context. This means spending time developing a deeper and broader understanding of the business units, and the problems and opportunities that you’re aiming to tackle with them.
I like to consider this from a top-down perspective:
Insights gleaned from this analysis help to inform your strategic options. From here you can better estimate the budget. By putting the investment in the context of business impact, the budget becomes far more palatable, if not necessarily smaller.
In an ideal world a cloud transformation project would be self-funding, returning benefits from early in the project to fund subsequent stages. The reality is that there’s usually a delay to the return on investment, and it is not uncommon for the delay to be significant.
With that said, you should still look for ways in which this can be mitigated. The larger the transformation effort, the more likely there will be options to do this. Early delivery of benefits can improve overall programme financials, even if it means the transformation programme is slightly less efficient (meaning an increase in total effort).
Also, by putting cloud transformation into a business context, you get a higher level of engagement amongst business stakeholders. This helps further maximise business opportunities and ultimately benefits realisation.
Now that you know the importance of engaging the business to help deliver a true transformation, and the importance of putting costs in a business context, you’re now ready to crack on with the transformation. This brings us on to myth no. 4…
Myth No. 4
It’s easier if you just outsource your transformation
Executing a transformation program can be daunting. Your initial thought might be to simply outsource the problem by engaging external experts. Having someone else deal with the issue for you to take away the pain!
However, there are drawbacks to this approach. For one, outsourcing the whole thing means your organisation misses out on a valuable training opportunity.
Furthermore, if you take the approach that the whole process can be outsourced, it’s likely to lead to a lack of necessary focus within your own organisation. This risks increased timescales and programme cost, and increased likelihood of failure!
What should you do?
Recognise that your cloud transformation programme represents a great learning and growth opportunity for your teams and the wider organisation. I wholeheartedly recommend you engage external consulting support. But then I would say that since, well, I am a consultant!
However, done right, you can leverage external expertise during the programme. You can formalise knowledge transfer and up-skill your internal teams. This will result in enhanced organisational capabilities thereby ensuring you’re better placed to support future projects internally. It also means your organisation will be more appropriately focused on the programme, thereby increasing the chances of cloud transformation success.
So who do you get to help you with your cloud transformation? This brings us onto our fifth and final myth…
Myth No. 5
Big cloud transformations need ‘big consultancy’ to succeed
Many times I’ve heard people say to me:
“Only a big consultancy has the depth of knowledge and breadth of expertise to really understand how to execute on a transformation program.”
But is it really true?
The answer is, it depends. It certainly isn’t necessary to engage a big consultancy as bigger doesn’t always mean better. In fact, often it just means bigger consultancy teams and thus bigger consultancy bills! When discussing this with a client once, he said to me:
“The big firms we work with tend to want to ‘do to us’. With you, it’s more a case of ‘done with us’.”
What should you do?
In today’s consulting world, boutique firms have gained an edge over the established big firms. The economics of the big firms come largely from a pre-information age. As this 2021 article in Forbes states, “But while global industry leadership is not up for grabs, small companies can still outflank McKinsey, BCG and Bain occasionally. Their business models rely on an army of MBA graduates with little experience. Information asymmetry that often gave them an edge is also harder to sustain in the age of Google. And none of them have found a way to fully embrace the opportunities brought by new technologies.”
What I’ve seen work very effectively – especially when a client’s team doesn’t have sufficient resources to scale – is where I’ve worked as a member of a boutique alongside a big firm. Essentially, taking a leadership role on the transformation, providing the client with strategic insight, and ensuring independent oversight of the bigger consultancy to ensure its one-size fits all approach doesn’t derail the transformation.
What to do next on your transformation journey?
Cloud driven business transformation is ultimately about delivering business value – as any technology programme should. By exposing these common myths, I hope you’re now forewarned and forearmed to tackle your cloud transformation.
If you’d like further help and guidance on how to tackle your cloud transformation, you can schedule a free consultation with us here.
