Five essentials to realize your cloud strategy - Part 1

Ever since Salesforce broke through into the enterprise software market over a decade and a half ago, both business and IT executives s have understood the potential of the cloud.  Vendors and system integrators were quick to respond with a plethora of solutions and marketing campaigns which resulted in a market full of hype, smoke and mirrors. Challenges such as outsourcing of mission-critical data, security and integration were sometimes ignored or even used as an excuse for doing nothing. However, sixteen years on, the market is maturing and more and more companies are articulating cloud strategies. Strategists, IT planners and enterprise architects are challenged both to formulate such strategies and to deal with the real planning and implementation issues behind them. The blog series “Five Essentials To Realize Your Cloud Strategy” examines how you can successfully face down these challenges.

In this first edition of the series let’s look at a typical strategy: “move 25% of business applications the cloud”. Of course your organization may have a variation on this but the principle remains the same. The aim of this strategy is to speed up cloud adoption in order to reap the benefits earlier. To achieve this, management chose to monitor a specific KPI – the percentage of business applications in the cloud. This is a blunt tool which does not address the issue of where  it makes sense to use cloud applications, nor does it guarantee that the benefits will be realized (because benefits such as cost reduction are not being assessed). However, as such blunt tools can be effective in initiating change, organizations like to adopt them and they hope that the outcomes achieved will be the right ones. So for now let’s ignore any concerns about this type of target and focus on the “now what?” in the title. The goal has been set, what can you do to achieve it?

The adage that “you can’t manage what you can’t measure” is as true as ever and for this reason KPIs are central to management reporting and performance measurement. But are you in a position to measure the percentage of business applications in the cloud. It’s easy, isn’t it? The number in the cloud divided by the total number and multiplied by 100. Unfortunately, the reality in many IT departments is that the number of business applications is just not known. Maybe you don’t have an inventory of the number of applications, or if you do, it’s often not accurate. Typically, there are multiple Excel sheets with different notations, data renewal cycles and owners. Exasperating this problem is that with the arrival of the cloud, business departments have increasingly been circumventing IT and acquiring applications from vendors directly. This is a serious problem that not only undermines IT governance thus exposing the company to unknown risk. It also means that there are applications out there that are not known to IT and so are not being counted.

Attaining a reliable inventory of applications is not an impossible task, but it also not trivial. Traditionally this has been done by a small group of architects or strategists. If you are part of a large organization you may have several hundred, if not thousands of applications, in which case each architect would be responsible for maintaining information on many applications. Indeed, I have seen companies where the application lists where known by the name of the person maintaining them. This approach led to the many Excel sheets with their different approaches and quality issues. If a person moved on, the list was, in some cases, never updated again. To successfully maintain the application inventory, including information on whether it is in the cloud or not, you need an approach that includes the many people involved in the life-cycle management of the many applications. They need to maintain the information on those business applications as part of the processes they execute daily and they will be performing role-specific tasks and will want role-specific reports.

So what kind of data do you need in the inventory in order to manage the cloud strategy for your applications? Firstly, you need to document whether the application is in the cloud or not. This should, however, not just be a binary yes-no attribute. There are different types of cloud deployments each with their own advantages and disadvantages. Software as a Service (SaaS) means that the plan-build-build cycle is outsourced. This leaves you to concentrate on roll-out and optimal usage. With Platform as a Service (PaaS) you remain in control of the business logic of the application, which could be a choice for applications which are changed often to retain competitive advantage. Infrastructure as a Service (IaaS) is generally the least disruptive option, but also leaves you with the same application stacks as before. On top of documenting the type of cloud, the inventory should also include KPIs that reflect the goals behind the 25% strategy, e.g. the application running costs or an indicator of the elasticity requirements for each application. By doing this, an instrument becomes available to facilitate reaching the overarching goals and not just the 25% target.

To be truly effective in cloud strategy planning and execution, the inventory also needs to document the context of the application within business and IT, i.e. the relationship between the business application and other objects within the inventory. For example, a business context is needed: which organizational units use the application and for what purpose they are using it? (I.e. which business capabilities does it support?) With this information, the impact of moving the application to the cloud can be investigated. On top of this, if you know the purpose of the business application, it will be easier to search for possible SaaS replacements, i.e. SaaS applications that do the same thing. This potentially includes SaaS applications already being used in-house by a different organizational unit.  Furthermore, you need to gain an understanding of the technology platform the application runs on. This information facilitates assessment of moving an existing application to a cloud hosted infrastructure. It also exposes the health of the technology platform which is an indicator of whether an IaaS approach is to be taken or the application be replaced completely.

Summarizing, planning and executing a cloud strategy such the 25% target example, requires a reliable inventory of the business applications in house. For this, many different stakeholders will need to contribute their know-how – in the context of day to day IT processes – in order to reach the required completeness and quality of the inventory. Furthermore, you need to capture basic information and KPIs in the inventory, along with many different relationships to objects such as organizations, business capabilities and technologies. This will require some investment in looking at the roles and processes in IT around application life-cycle management. Last but not least, you should rely on a robust tool to host the application inventory. Using MS Excel or similar will fail to support the stakeholder needs, complex relationships and process support. Such inventories are found at the heart of EA-based IT portfolio management solutions such as Alfabet and are facilitators to achieving cloud strategy goals.