As cloud technology becomes more prevalent in today’s corporate technology, it becomes more important to understand how to determine a successful migration to the cloud. Although the cloud is no longer a new topic, the evolution process is still in its infancy for most organizations. In theory, moving to the cloud can seem like a “no brainer” but like many complex projects, if proper planning and expectations are not in place, a migration to the cloud could be an expensive failure for your organization.
There are two main reasons that moving to the cloud can be considered a failure. One is the inability to properly value the user experience and the second is improper financial cost evaluation.
Cloud solutions move your infrastructure from a local network to one over the internet. This is a fundamental change in how your employees do their jobs. This fundamental change may reduce the speed at which your users can access their data, how their software and files look and feel and how security is implemented. Moving to the cloud requires a significant change for the user because they will either utilize a remote desktop technology or a new user mobile interface for all applications. Either of these changes could be challenging for your company to embrace if there isn’t a long lead time for testing, training and understanding. By simply cutting over to a new way to access all their data and programs without employee buy in, management faces an uphill battle. Moving to the cloud is a culture change. Management must not only buy in to the user experience change themselves, they must also enforce the requirements for users to learn the new process. If not, your employees will not embrace your new technology path and your move to the cloud could be a failed (and expensive) project.
Another reason that a move to the cloud can look good on paper but could be a failure is a financial one. Basing the decision to move to the cloud strictly on financial ROI is challenging. Moving to the cloud changes the accounting. Migration technology typically modifies expenditures to be reclassified from capital expenses to operational expenses. You will go from lump sum payments to reoccurring payments.
Usually a move to the cloud has a great ROI in the short term but is more expensive long term. It is the renting vs. owning principle. The breakeven point for most cloud cost vs lump sum payments is 3 years. Since most companies do not deploy new technologies less than every three years, they may save money long term by continuing to leverage on premise solutions vs hosted solutions. The main point to remember is that if you base the decision to move to the cloud solely on a financial return, you may not see the ROI you anticipate. The reason to move to the cloud should be based on your company’s strategic goals or to leverage new technology, not because it could show cost savings in the short term.
There are plenty of things to take into account when deciding to move to the cloud. To talk more about the ROI of a cloud strategy for your company, contact ATB Technologies today.