Is Your Cloud Strategy Doomed to Fail? How to Avoid the 5 Common Traps of Digital Transformation

Migrating to the Cloud? How to Stop Spiraling Costs and Maximize ROI with a “Migration Factory” Approach

Don’t let your cloud transformation become a financial disaster. Discover the 5 critical traps that derail migration projects—from poor cost planning to vendor lock-in—and learn the strategic “proactive assurance” framework that helps IT leaders reduce risk and secure long-term value.

Your cloud journey is risky, but it doesn’t have to be reckless—continue reading to learn the 5-step roadmap that will help you build internal expertise and manage consumption before costs spiral out of control.

Recommendation

There’s explosive growth in cloud computing, with businesses such as Microsoft, Google, and Amazon spending billions on the technology. Research shows that just under a third of IT leaders are planning to follow suit, investing in the cloud. However, managing your cloud transformation can be tricky: You risk losing money, tarnishing your reputation, and damaging stakeholder relationships if you navigate the transition the wrong way. Gain insight into how best to avoid “common traps” and maximize your chances of a successful transformation.

Take-Aways

• To remain competitive, organizations should harness the benefits of cloud computing while mitigating risks.
• Avoid “common traps” when navigating your cloud transformation.
• Leverage the benefits of cloud computing by following five key steps.

Summary

To remain competitive, organizations should harness the benefits of cloud computing, while mitigating risks.

Cloud computing spending has risen rapidly in recent years: At Amazon, Microsoft, and Google, spending increased by $148 billion in just five years, reaching $211 billion by 2023. According to Boston Consulting Group research, 30% of IT leaders plan to boost cloud spending during the next year. When properly implemented, cloud computing can be more efficient, flexible, fast, and affordable than in-house IT solutions. In fact, switching to a cloud-based model can lower your infrastructure costs by as much as 40%, while accelerating your time to market by up to 60% and elevating productivity up to 50%.

“Avoiding the potential pitfalls during a migration to the cloud is critical if companies are to realize the full benefits of cloud computing.”

Cloud migration isn’t always a straightforward or smooth process though. There’s a lot at stake when it comes to successfully managing your cloud transformation: If you switch to the cloud without proper planning and coordination you might see financial losses due to rising costs, project delays, and resource mismanagement. You risk missing opportunities, frustrating your customers, attracting scrutiny from regulators and investors, harming your reputation, and destroying your competitive advantage. With the right mindset and risk mitigation framework, you can minimize your chances of failure when embracing your cloud transformation.

Avoid “common traps” when navigating your cloud transformation.

When transitioning to a cloud computing model, organizations should be wary of the following five hitches:

1. Treating the cloud like a data center — Many companies attempt to replicate a traditional data center model in the cloud, and fail to leverage the benefits of the cloud’s modern platform capabilities, missing out on potential improvements in efficiency and performance. For example, companies that simply “lift and shift” their operations to the cloud might be missing out on the cloud’s Platform as a Service (PaaS) capabilities.
2. Lack of planning regarding costs — Companies must purchase cloud infrastructure on demand, which can make costs more volatile and tough to predict. It’s vital that you carefully plan, monitor, and manage spending during (and after) your cloud transformation.
3. Running cloud and data center operations simultaneously — If you fail to properly plan your cloud transformation and data center exit, you may end up paying for two different systems. Carefully consider your timing regarding your data center exit and cloud migration.
4. Choosing the wrong partners — When planning your cloud transformation, be wary of the third parties you choose to work with. Companies often choose a cloud services provider (CSP) based on cost savings, without properly vetting the partner to ensure they have the expertise required to migrate operations successfully to the cloud. Overreliance on third-party providers may also result in a loss of too much control.
5. Running multiple cloud programs at once — Running several cloud programs simultaneously with different vendors can result in difficulties, such as a lack of standardization and integration. If you must use multiple providers, divide the workloads logically between them (for example, one provider deals with your corporate IT, while another focuses on your operational applications).

Leverage the benefits of cloud computing by following five key steps.

Take the following steps to maximize your chances of achieving the full potential of cloud computing:

1. Embrace a strategic transformation — Craft a well-honed cloud strategy, clarifying the scope and objectives of your move to a cloud-based model. Communicate your vision throughout your organization and align it with your internal governance and policies.
2. Adopt a “migration factory approach” — Run experimental pilots to determine the best cloud migration and architecture requirements for migrating your various business functions. Scale the best approaches for each workload type, embracing continuous improvement and making the process iterative.
3. Manage cloud consumption levels — Consider using tools such as Cloud FinOps to manage cloud spending and consumption.
4. Build in-house skills — Avoid excessive reliance on third-party vendors by developing skills in-house. Hire leaders with cloud transformation expertise, upskill in-house talent via training programs, and recruit third-party specialists you trust for additional support as you upskill teams.
5. Establish a “proactive program assurance capability” — Mitigate execution risk by developing the capacity to anticipate challenges, ensure your cloud strategy aligns with your goals, preserve quality, and improve efficiency and effective resource management.

“Successful organizations ensure that their cloud program aims to change the business rather than the other way around.”

Developing a robust and effective de-risking strategy will help you identify common challenges early on, steering your company toward success. As you navigate your cloud transformation journey, take time to validate and test your initial migration and cloud transformation strategy, ensuring you have the governance mechanisms and design authority in place to resolve any issues that arise quickly. As you scale up, complete migration of just a few minimum viable products (MVPs) initially. If momentum on executing your migration stalls, act promptly, reassessing and refining your approach as you move forward.

About the Authors

Krishnan Ramachandran, Richard Bennett, Steven Alexander Kok, Jon Brock, Sukand Ramachandran, Magnus Morin, and Sesh Iyer are professionals with Boston Consulting Group.