MarketBite

Before diving into any cloud project, ask these questions:

Posted on: November 11, 2011


1) Is Your Business Situation “Vertical”?

Good candidates for cloud computing include “single business processes or small numbers of business processes with consistent requirements that can be considered as a single set.” In other words, it’s easier to move a focused set of requirements from a single business unit, such as human resources or marketing tasks, to cloud applications.

 

2) Is There Competitive Differentiation in Your Processes?

You may have a way of engaging customers that gives you the highest satisfaction ratings in your industry. Or you may have higher quality products than you produce very cost-effectively. Can the underlying technology supporting these processes be swapped out effectively? The Open Group authors advise that if the business process under consideration is a key differentiator for the business, you need to examine if the process is insulated from changes in the technology. If not, then cloud may not be a good candidate here.

 

3) Is the Differentiation IT Based?

If there’s some kind of secret sauce your company employs that is embedded into the code of its applications or systems — such as rapid, sub-second responses that competitors have yet to match, then cloud is not the way to go.

 

4) Are There Any Impediments to Outsourcing?

Cloud, for all intents and purposes, is a form of outsourcing. Barriers that could stand in the way of cloud are the same that prevent more traditional outsourcing arrangements, such as in-house services that cannot be matched externally; long-term leases; switching costs; fixed assets with depreciation value; an immature business architecture; business culture; geographic location sovereignty rules (particularly in the EU); industry regulations; compliance audit rules; and even labor contracts. Compliance concerns are a particularly important area that also ties into information security — you need to know who is handling your information, and how they are handling it.

 

5) Are There Impediments to Cloud Adoption?

Most of the impediments to be considered for outsourcing apply also to cloud

adoption. More cloud-specific barriers include highly customized resources; such as enterprise licenses; policy restrictions on resource sharing or on control of configuration changes; too few potential subscribers; unacceptable service level agreements from cloud providers; and unacceptable recovery point objective (RPO) and recovery time objective (RTO) performance by cloud providers.

 

6) Is the Primary Business Driver “Cloud Compatible”?

Cloud-compatible business drivers may include the need to reduce medium and/or long-term total cost of ownership;  improve cash flow; shift from CAPEX to OPEX; have access to functionality or domain expertise; or to become a cloud provider yourself. Business drivers not compatible with cloud may include the need to cut short-term costs; increase capacity without need for third-party financing;  or change tax situation (recognize depreciation, job creation incentives, …); or shift fixed assets (potentially including leases) or labor to provider.

 

7) Is the Application Insulated from Changes to the Business Process?

The business logic should be separated from the underlying technology. As the Open Group authors put it: “A business person with no knowledge of the application should be able to modify the definition of the business process without impacting the ability of the application administrator to manage and maintain the application efficiently.”

 

8) Will the Cloud Solution Be a Platform?

Transforming  the solution layers below the business processes and applications into a standard, shared configuration for delivering all of the company’s IT services may be a good case for cloud computing. These layers typically include middleware, operating system, hardware, and data center infrastructure.

 

9) Are the Hardware, Operating System and Application Custom-Made or Specialized?

If the hardware, operating system and applications layers are all custom-made, then cloud solutions are not a good fit,” Harding and his co-authors state. Cloud may not be a good fit for handling legacy IT solutions either. Cloud may be a workable approach, however, if only one of these elements (hardware, operating system, or application layer) are based on custom technology.

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