Are you cloud-ready?

Are you cloud-ready?

Implementing cloud solutions without proper groundwork can throw up all sorts of challenges. Steven Salmon, former principal adviser at KPMG in the UK, tells CFO Agenda when and how organisations can get ready for the cloud.


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Are you cloud-ready

When it comes to cloud migration, doing the right homework counts. Most businesses are familiar with the benefits of removing legacy, on-premise systems, but not everyone is actually prepared for change.

Migration to cloud is not an all-or-nothing approach; it is gradual, from business functions leveraging software-as-a-service (SaaS) cloud vendor offerings, through to the IT operations function moving to platform-as-a-service and infrastructure-as-a-service. In determining readiness for SaaS adoption at the business functional level, it is key that the organisation is ready, willing and able to accept business process change. These SaaS solutions are designed to be commoditised from the outset, so vendors can reap the rewards of ‘one version’ serving many organisations on the same platform. They offer ‘best in breed’ processes to the business, but with the focus on configuration, not customisation, the migration to cloud becomes more about a business change programme than an IT focus, and that needs to be well understood by all.

"Almost any aspect of business – HR, tax, finance, etc – can be run through the software-as-as-service delivery model."

Organisations that derive the most value from this transformation recognise the legacy of complexity and inefficiency that has built up over the years through the customisation of on-premise applications, and set out to simplify the way they work through the cloud, says Steven Salmon, principal adviser at KPMG in the UK.

Strike a balance

“Productivity suites like Microsoft Office 365 and Google Apps are a good example of the need for strong business engagement,” Salmon says. “It may make good financial sense to simply outsource to a cloud service, but it is commoditised and, as such, less flexible, so when it moves into that environment, the business often realises it’s quite constrained in terms of what it can do. Sometimes it ends up pulling a significant part of the services back in-house, eroding the original business case.”

All cloud services have core prerequisites for integration that can delay a project if left unplanned.

Historically, there’s been a lot of investment in internal, private infrastructure that can ‘guarantee’ a quality of service of application across the enterprise, within and between countries and regions. But when companies are looking to procure a service from the cloud, these requirements change in ways that need to be considered.

“You move away from having to have all this resilience and cost in your internal network infrastructure,” Salmon says. “And suddenly you’re in a position where you need to duplicate it for your internet break-up points. These break-up points may have been considered of relatively low importance, but now become very significant for all sites. So you have to look at your overall communications strategy and the balance between your WAN and the internet.”

Work together

Acting in silos or ignoring important stakeholders is another common mistake companies new to the cloud can make. Cloud services provide the business with the opportunity to contract direct, without the involvement of IT in some cases. When a particular function of the business, like sales or marketing, forms contracts directly with cloud vendors, it can often break more than it fixes.

“They are looking to derive the best service for their functional needs,” Salmon says, “and don’t always know how all the information they access is used in the wider context, across the enterprise, feeding into applications used by other functions as part of a wider business process. Now it has moved to the cloud, those interactions and interfaces may break, and the business faces significant costs that it wasn’t expecting, and has to tailor and adjust its existing systems and infrastructure. This has to be a joint project between the business and senior IT stakeholders.”

The extent of each function’s involvement in a project will change according to the case in hand, says Salmon. If the area involved is specific to a particular aspect of the business then that function should lead the project with the assistance of IT. But in cases of non-functional, non-specific change, IT may be best placed to run the programme.

Plan carefully

Whatever the balance proves to be, every aspect of cloud migration requires careful management and planning. The integration of cloud applications into any organisation involves managing a complex ecosystem of cloud vendors, in-house applications and infrastructure services.

“It’s about creating the technological awareness and overseeing the technology providers to fit into your integration strategy,” Salmon says. “It needs to be controlled by a master integrator who really understands the DNA of all this.” That capability should reside in-house, within the CIO office, as it moves ever closer to the business.

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© 2017 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

This article represents the views of the author only, and does not necessarily represent the views or professional advice of KPMG in the UK.

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