By Rameysh Ramdas
Associate
Back in the early 2010s I was working at Agilent Technologies, a spin-off from Hewlett Packard, as an IT Integrating Manager. At the time Agilent was running their human resources on PeopleSoft. Because HP had been an early investor in PeopleSoft, we had been grandfathered in at a deeply discounted rate. However, our Vice President of Human Resources had taken a fancy for the newer, cloud-based solutions. “Take a look at this, Rameysh,” he urged. “Let’s move forward with it!”
It didn’t take much looking for me to come back to the Vice President and say no. Because of the deeply discounted rate we were paying for our on-prem PeopleSoft system, moving to the cloud would have increased our costs more than tenfold! Given the fact that our existing software was meeting our needs, this just didn’t make sense, especially for something as non-revenue-producing as a human resources system.
The cloud is wonderful—if it makes sense for your specific situation
In my nearly 18 years of experience as an IT leader, I’ve never been a person who wants to jump to the cloud just because it’s the popular thing to do. There must be good, solid business reasons to make this move.
Before you head to the cloud, here are five important questions to ask:
- Is it cost-effective? Take a close look at the numbers, factoring in all costs involved—including those that are often overlooked. For example, while the costs associated with your on-prem system are mostly fixed, you can expect your cloud subscription fees to increase every year. You need to take these projected cost increases into account. If your on-prem application includes third-party add-ons that would not be part of your move to the cloud, you need to consider the costs of addressing the “stranded workload” this would create. Another often-overlooked cost is network connectivity. You’ll need to invest more in this area, to handle the increased bandwidth needed to run in the cloud.
- Is it fully compatible with your other systems? Take a look at your entire landscape to ensure that the proposed cloud-based system will work with your existing systems. This is generally a bigger issue for the parts of your landscape that are on-prem.
- Does the business have the willingness and desire to adapt to the changes imposed by the cloud-based provider? When you have an on-prem system, the system is under your control. When you move to the cloud you lose that control. Once you get in the cloud you must upgrade based on their upgrade schedule, which is usually quarterly, and adapt to whatever changes these upgrades bring. If these changes impact the way that system interacts with your other systems, you may need to drop everything else on your schedule to immediately address this. If the updates bring new processes to the table, you must adjust your processes to account for this.
- How much ability will you have to influence the cloud solution provider’s product roadmap? Once you get to the cloud, you’re one of many customers. Although the solution might appear to meet your needs now, if your business requirements or regulatory framework changes, how much clout will you have to get them to develop new features or functionality to address this?
- Is the cloud service provider well-established (or at least well-financed)? What happens if you go to the cloud with a fledgling company that goes out of business a year or two later? In this situation, you’d be left with a product that doesn’t work anymore, and the need to find a replacement—most likely on very short notice.
There are pros and cons of moving to the cloud
What I’ve seen is that many CIOs and VPs want to have the “latest and greatest” tools because these tools look good on their resumes.
I’m not in alignment with that approach! I believe that IT exists to serve the business. We are there to act as trusted advisors that ensure the business’ interests are met. Before a decision as important as “moving to the cloud” is made, it is our job to help the business take an objective look at if the decision makes sense.
Sometimes moving to the cloud gives you a better system and lower costs while forcing the business to adapt to the industry best practices that are built into the cloud-based solution. Other times moving to the cloud brings increased costs and headaches.
Until you consider all of the relevant factors, you won’t know if jumping to the cloud is a great idea for your business…or not.
Need help doing this analysis? Give us a call! This type of IT strategy work is one of our many areas of expertise.
About Rameysh Ramdas
Rameysh is a highly accomplished technology leader with extensive experience managing mission-critical cloud and on-premises enterprise applications, and addressing global delivery, global support and vendor management. His successful track record includes delivering value at global companies during all cycles of business, including high growth, M&A integration and downturns.
About CIO Professional Services
Based in the San Francisco Bay area, CIO Professional Services LLC is a top-rated Information Technology (IT) consulting firm focused on integrating Business and Information Technology. Our consultants are all hands-on executives who are veteran CIOs and Partners of Big 4 consulting firms. Companies come to us seeking assistance with their information technology strategy as well as for interim or fractional CIO / CTOs, and negotiation and program management/project rescue assistance.