3 Steps to Build a Cloud Business Case That Gets Funded

By David Wright, Sr Director Analyst at Gartner.

With worldwide end-user spending in EMEA on public cloud services forecast to grow from $111 billion in 2022 to $131 billion in 2023, and cloud software spending set to represent 34% of total enterprise software spending in EMEA - cloud has never been more important in business strategy. However, while companies are embracing public cloud, many of them have yet to see the ROI they expected because of flaws in their original business cases. Mounting a business case for cloud adoption that is fit for purpose is key to set the organisation up for success and secures the funding it deserves. To do so, infrastructure and operations (I&O) leaders should follow three key steps.

1. Start with Proven Templates

First, start with a framework that accounts for the typical issues that cloud migration projects often face. It is not enough to simply estimate the cost of cloud infrastructure and operations. Realistic forecasts need to include the costs of workload migration, application modernisation, organisation transformation, and the “sunk cost” of left-over, on-premises IT capacity.

An effective cloud business case will use detailed internal assessments to establish a strong business justification, including a full scope of costs:

· If there is a plan to shift existing on-premises workloads to cloud infrastructure as a service (IaaS), assume that an ongoing investment in operational cost optimisation will be required to achieve lower total cost ownership (TCO). Build a business case that goes beyond fast cost savings to estimate the true business value of cloud adoption.

· The business plan must also account for the time and investment needed to master “cloud native” ways of purchasing, deploying, automating, securing, and optimising IT resources. Forecast the expected benefits of cloud adoption based on a realistic assessment of the organisation’s pace of internal transformation.

2. Gain and Hold Executive Attention

I&O leaders are often inclined to model the benefits of cloud adoption in IT terms: higher scalability, tighter security, greater efficiency, etc. However, business decision makers rarely view IT performance improvements as sufficient justification for making a strategic investment. They may believe they are being fooled by IT into throwing money at a problem that should properly be addressed through existing IT budgets.

To build a compelling business case for new investment, identify the key business objectives executives care about. Then assess the impact that cloud infrastructure will have on those objectives and compare the business value of this approach with other available options. Ensure new investment is being aimed toward the organisation’s most urgent business issues.

After identifying the high priority objectives, collaborate with business leaders to review the critical business processes that support these objectives and help them assess the ways that public cloud infrastructure could be used to significantly improve them.

Demonstrate that the business cannot easily obtain those outcomes some other way. Providing a comparison of different approaches will build confidence among executives that the business case for cloud is scoped to the areas where it will have the most impact.

3. Mount a Campaign for Change

I&O leaders with a vision for the future must ensure that their cloud business cases are as adapted to continuous change as the cloud itself. They must embrace change in how their business cases are structured, as well as how the value of those cases is communicated.

They must work to free their business cases from waterfall thinking and, instead, propose a linked set of investment cycles needed to gradually adopt a new way of delivering IT infrastructure to the business.

The investment case for a transformation to cloud computing is not often landed through a single, detailed presentation, but through a gradual socialisation of ideas. It is crucial that I&O leaders equip themselves and their CIOs with the material needed to convey the cloud business case to others and sustain interest in it at executive levels.

In the real world of cloud adoption, there is no such thing as a beginning and an end. I&O leaders must view their cloud strategy as a continual work in progress and prepare a business case that anticipates common cost problems, aligns with business needs, offers a staged investment plan, and embraces continuous improvement.

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