The inevitable CEO – CIO Conversation?

The past conversations have been tense enough: 

CEO  : Jack, what are we doing about the cloud? 

CIO  : Al, it’s ok, the cloud is insecure, no governance and we’d be at the mercy of someone else... but don’t worry, we moved our email and our on-boarding app to it and sort of checking it all out…

Tomorrow's conversation: 

CEO : Jack, I know our company has been a profit mecca for 25 years, but the guys at the CEO lunch told me we have to have a “cloud migration strategy" or we’ll get undercut by competitors that don’t even exist right now. Plus, I'm told our valued I.T. staff can get certified in these services. I hear there's even an art to juggling different cloud providers and optimizing the service costs.

Ok, both conversations are accurate based on the time they occur. Times have changed, and the train has long left the station. Cloud providers actually offer the governance specs you’re looking for, for the most part. And yes, guys and gals are spinning up companies like spinning up cotton candy because it’s so cheap to do now. Your company’s “secret sauce” is what made it successful for the last two decades, but nowadays it’s no longer secret. Your market share can be assured by providing top quality, but all things being equal you’ll have to produce your product at a cost on par with new competitors. Besides, you’ve been frustrated at time to market, and I.T. technical debt has been limiting company growth for years.

The answer is to migrate the expenses that you can to the cloud, where it makes sense. But what “makes sense”? Those factors should drive your cloud migration strategy. If your company has custom code that runs on an old OS that’s not offered in the cloud then your plan has to also include migrating the OS. Worried? You shouldn’t be, you knew you’d have to do it anyway.

Check out this table, I know it’s busy, just cast your eyes on the three arrows.

The graphic is showing you the ideal situation – conventional data center expenses rolling off over time and cloud expenses going up. Yet, the THIRD red arrow is the most important, the total is less than ever, and the Sparkline trend shows dramatic downward trending! Is it overstated? Not if you plan it out well.

Guess THE most important factor? Is it the execution and migration? Nope. Is it the limberness and scalability improvement? Nope. THE most important factor of success in cloud migration is proving to the CEO (via the CFO) that your net expense trend is going down! But, your plan must have a well-organized process to retire services – and while tempting, it simply can’t be somebody’s part time side job.

That’s a risky proposition – but success can be assured if, and only if, your migration plan has someone ensuring that you’re killing off leases, reducing power and cooling consumption, consolidating data storage and redeploying assets to other areas.

The migration plan itself is yet another subject and involves a deep dive on each application. Not all apps are created equal, have the same risk or have the same importance or the same priority. So, the plan will be multi-faceted. Apps that can’t move today, apps that must move soon and apps that might make more sense staying in-house. Approach this with the old 80/20 rule and you’re the hero in the next annual report.

(Patrick Bouldin is the President & CEO of Run This Project, specializing in cloud computing strategy and Business Process Improvement.)