Develop a blueprint for successful transformations
It might seem obvious, but turns out it's anything but: Organizations that don't have a well-defined, well-articulated understanding of what they should transform and why struggle with overall execution and waste time and energy. Organizations that know why and what tend to master the smaller details.
In years of experience helping customers across all industries and geographies, we've learned that strategy and governance is perhaps the most foundational. Get this right, and progress elsewhere will follow. Proceed on your journey without a firm grasp on your strategy, and you will cap the value you can create or, worse, destroy value altogether.
Across our engagements, organizations that are effective at building effective strategy and governance capabilities have developed a business-driven and unbiased business case for their projects, underpinned by return on investment. They do other things well, starting with communications and oversight, and they recognize the need to lead and manage through change.
The common thread for organizations that underperform in the strategy domain is that they lack a clear purpose for adopting cloud. They may be pursuing a project because a CEO was inspired by a magazine article or because they believe cloud is a silver bullet, without understanding exactly what that means in terms of the business objectives they're targeting.
They often exhibit poor leadership alignment and buy-in. And they struggle with economic factors, ignoring economic realities and failing to understand and adjust to the cloud model's operating expense approach. Shifting to variable cost management requires relearning your cost structure and how to effectively manage these costs. Often, this gets further complicated by plans to move workloads that are ill-suited to operating in a cloud-native, variable model.
Companies that are exceptional at cloud transformations realize that these changes take time. A pharmaceutical company we worked with recently understood it needed to effectively communicate the long-term impact of a move to the cloud. So the company invested in a third-party production company to develop high-impact communications collateral that ensured the messaging IT presented to the company about the transformation excited the business and drove action. This included developing video and other content and messaging to empower everyone from the CIO down to data center operators to talk about the initiative's alignment to corporate strategy and how it would benefit the business.
This company did three things really well: 1) It developed an effective business case for why it was going to the cloud, 2) it developed a communications strategy to bring in a third party to inspire, and 3) it deployed a Cloud Business Office to provide oversight to sustain that transformation over time.
Economics is a key component of a cloud transformation strategy. Organizations that adopt OpEx cloud-native models estimate the cycles they think they'll consume—but many neglect to manage and optimize the process after workloads have moved. In one recent engagement, IT leaders at a large healthcare provider were stunned by a spending trend that was three times what they had budgeted for. As it turned out, no one was shutting down idle workloads, and they were using expensive database platforms when they could have been doing work in less expensive ways. Applying active cost management and educating the organization's use base was able to return $10 million in cost avoidance in one year.
Please read: The rapid transformation of healthcare
Failures in strategy and governance show up in the most painful ways possible, typically incurring significant cost overruns if workload strategy is not aligned with a viable economic model. We've been called in to help after organizations have blown through their budgets quickly and experienced frustration when projects stall.
Another way cloud transformations fail is when an organization doesn't align behind a vision for hybrid transformation. The CIO launches a plan for a hybrid operating model and assumes others in the C-suite are on board. Different leaders push for different cloud platforms or cling to a pure data center model or different workload approach and factions develop. Ensuring a broad leadership coalition understands and is engaged with the vision for the future is critical.
Effective hybrid transformation requires a well-defined strategy, but effective leadership and stakeholder engagement is critical to its success. The hybrid transformation accelerates only when everyone is rowing in the same direction.
The common thread for organizations that underperform in the strategy domain is that they lack a clear purpose for adopting cloud.
This article/content was written by the individual writer identified and does not necessarily reflect the view of Hewlett Packard Enterprise Company.