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Embracing a Cloud Operating Model for Transformational Change

Hybrid Cloud Series

February 09, 2024

For some time, the cloud has been viewed solely as a technological lift and shift, with servers moving skyward and applications finding new homes. But the potential impact of the cloud goes much deeper, extending to how organizations can operate in a more optimized and efficient way. Here's where the concept of cloud as an operating model comes in, and why it's important to understand: it's a journey, not a destination.

Instead of a one-time event, embracing a cloud operating model, via hybrid cloud, is a transformative process. It's about defining how your people, processes, and platforms collaborate within the cloud and across your entire business. This strategic approach unlocks agility, both in technology and business operations, paving the way to achieve your desired outcomes.

It’s no surprise tech leaders are rethinking their operating models. An IDC study reveals that 60% of CIOs are planning to adapt their operating models by 2026, seeking to optimize value, agility, and risk management.

What does this cloud-like operating model look like in practice? Imagine your digital infrastructure not as static "hardware," but as flexible software that can and should adapt to your business needs. As Gartner emphasizes, the speed of deployment has become just as critical as choosing the right infrastructure in the first place.

By implementing a cloud operating model, your organization can:

  • Break down silos: Teams no longer operate in isolation, fostering seamless collaboration and knowledge sharing.
  • Streamline workflows: Processes become more efficient and automated, eliminating unnecessary friction.
  • Empower rapid experimentation: Teams can quickly test ideas, iterate, and deliver value, accelerating time-to-market and responsiveness to customer demands.

One tangible example is the value FinOps can unlock. While the cloud's pay-as-you-go model promised cost savings, the reality of tracking and managing resource usage proved challenging. FinOps brings data-driven insights and governance, ensuring you optimize your cloud spend and maximize its value.

Remember, the cloud operating model is a continuous journey, not a fixed destination. As your organization evolves and technology advances, your model will need to adapt as well. Embrace the journey, stay flexible, and watch your cloud transformation unlock its full potential.

How to Develop an Effective Cloud Operating Model

To transform your business, you need a cloud operating model that is aligned with your organization's overall business strategy and business goals as well as your cloud strategy. It should also be flexible enough to adapt to changes in the business environment and the cloud computing landscape.

Things to consider before you start:

  • Get buy-in from senior management. This will help to ensure that your cloud operating model is aligned with the organization's overall business strategy and goals.
  • Involve key stakeholders, including business users, IT staff, and cloud experts.
  • Use our 3-step framework to provide a starting point and help you to ensure that your model is comprehensive and well-structured.
  • Be flexible. The cloud computing landscape is constantly evolving, so it is important to be flexible in your approach to cloud operating models. Your model should be able to adapt to changes in the cloud computing landscape and the organization's business needs.

3-Step Framework for Developing a Business-Driven Cloud Operating Model

An organization’s business strategy should come first, then a cloud strategy, as that will provide the foundation for the cloud operating model: 1) Define your business goals, 2) Define Your Cloud Strategy, 3) Develop Your Cloud Operating Model.

Step 1: Define Your Business Goals

The first step is to define your business strategy. This means understanding your organization's goals and objectives, as well as the challenges and opportunities you face. Draft a plan for meeting the specific business needs of your organization, including requirements for performance, scalability, reliability, and availability.

Things to consider:

  • What are business needs?
  • What are your key business drivers?
  • What are your business goals: What are trying to achieve with your data, applications, and processes?
  • What are your desired business outcomes?

Step 2: Define Your Business-Driven Cloud Strategy

Once you have defined your business strategy you can start to develop a cloud strategy to drive your desired goals and outcomes. This includes assessing your current IT environment, defining your application strategy, researching different cloud computing platforms and services, and developing a: Finance plan for managing cloud costs, including budgeting, forecasting, and cost optimization, and security plan for ensuring the security of your cloud environment, including security policies, procedures, and controls.

  • Business Drivers for Cloud Adoption: Why are you moving to the cloud? What are the specific business benefits and desired outcomes you hope to achieve by moving to the cloud?
  • Assessment of Current IT Environment: What are your current IT assets and resources? What are your current IT processes and procedures?
  • Cloud Deployment and Service Models: Will you use a public cloud, private cloud, or hybrid cloud? Which cloud services? Will you use Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS)?
    • Where is the most strategic, cost-effective, and secure place to store your data, apps, and processes to enable those business outcomes? Should they be in the cloud? If so, which cloud/type of cloud?
    • Will you have the right infrastructure and resources in place to drive your desired business outcomes?
  • Security and Compliance Plan: How will you ensure the security and compliance of your cloud environment, including security policies, procedures, and controls.
  • Finance Plan: How will the organization manage the costs of its cloud environment, including budgeting, forecasting, and cost optimization?

Once you have a clear understanding of your business strategy, you can start to develop a cloud operating model that will help you achieve your goals by applying cloud as an operating model.

Step 3: Develop and Implement Your Business-Driven Cloud Operating Model

Once you have defined your cloud strategy, you can begin to figure out how to run your business and your cloud environment to achieve your business goals using cloud computing.

The business-driven cloud operating model defines the people, processes, and technology needed to manage the cloud environment and your business, in a way that ensures your organization can achieve its business goals, objectives and desired outcomes.

  • Application Migration Plan: What data and applications will be migrated to the cloud? How will the organization migrate these to the cloud?
  • Cloud Governance: How will the organization govern its cloud environments? What are the policies and procedures? Who will be responsible? How will you ensure compliance with regulations? Manage risk?
  • Cloud Operations: How will the organization operate its cloud environment to drive desired business goals and outcomes? How will you manage infrastructure and resources to enable and maintain the flexibility, agility, and scalability to innovate, collaborate, and quickly adapt to changing market conditions, and customer needs?
  • Cloud Monitoring and Reporting: How will the organization monitor, optimize and report on its business-driven cloud environment? What metrics will you measure? How will you use data to optimize your environment?

Once you’ve considered these questions, you will have a business-driven cloud operating model that’s comprehensive, effective, and can drive your business goals and objectives, you are ready to implement it. Remember to monitor its effectiveness and adjust as needed.

Call to Action

Organizations that want to stay ahead of the competition and transform their businesses should embrace the cloud as an operating model. By doing so, they can unlock the full potential of the cloud and achieve their business goals.

A business-driven cloud strategy can help you achieve your business goals, but it's not enough on its own. You also need a cloud operating model to ensure that your organization and cloud environment are managed effectively, even as your business continues to evolve.

Start building your cloud operating model today and harness the true value of the cloud to stay ahead of the competition.

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