It’s time to take a more comprehensive organization approach to cloud by incorporating detailed financial planning for the cloud. Brian Reynolds, principal fo...
Cloud computing has moved from an idea, to an experiment, to a mainstream practice for federal IT departments and the programs they support. Often, the focus for cloud adoption has landed on the technical requirements – application rationing, code updating, network requirements, to name a few.
Now it’s time to take a more comprehensive organization approach to cloud by incorporating detailed financial planning for the cloud. Brian Reynolds, principal for the Digital Transformation and Management Practice at Grant Thornton, calls this approach FinOps, a play on the DevOps principle in which technical, program and financial people work together continuously to ensure the agency gets the best return on the dollars it invests in commercial clouds.
Costs alone are important, to be sure. They’re “absolutely a core element of ROI and understanding whether or not moving to the cloud, in fact, makes good business sense,” Reynolds said.
But direct costs are only part of the calculation. More broadly, he said, agencies need to fully understand the motivations for cloud computing to begin with.
“Those motivations can be cost savings related, but they could also be oriented around the need to exit the data center, the need to improve business agility, the need to transition from end-of-life or end-of-support for [existing] technology,” Reynolds said. He advises taking time to get all of the parties together ahead of a cloud migration. Then define the motivations and specify the metrics for the outcomes they’re seeking. The team, he added, should include program managers, infrastructure and operations people, application developers, and ideally, people from agency finance.
The motivation can help point up which applications to move sooner rather than later, Reynolds said. If cost savings is the main motivation, then analysis is like to who it’s wiser to start with non-mission-critical applications. That approach can move the organization up the cloud maturity scale initially.
Conversely, he said, “if we have a business imperative, or a market need or some constituent need that requires mission critical applications to be adjusted or improved, then those become our priority.”
Reynolds said organizations using technology business management, or TBM, have a better chance of achieving the holistic approach that brings in both technology and finance. TBM, he said, gives the organization a finance view, an IT infrastructure view, and a workload-oriented view which, combined, help drive stronger cloud decisions.
TBM, he added, ensure all of the costs are visible, including not just direct cloud charges but also the costs of migration, facilities, and labor – both internal and external.
“These costs are all embedded within your cloud service costs,” Reynolds said. “And so when we think about doing a comparison, we have to make sure we really do consider not just the obvious hardware, software licensing sorts of costs. We also have to think about some of those costs that might be less obvious. TBM can be a way to think about and get a handle on those costs very quickly.”
Cloud migration is absolutely a strategy for tech debt remediation…The code base and the tech stack depreciation are certainly key to making those kinds of decisions.
Principal, Digital Transformation and Management Practice, Public Sector, Grant Thornton
I think [with] FinAps on the cloud side, we're looking not just to be informed about our costs, but to then take steps to optimize those costs, and then ultimately, to operate and continually improve those costs.
Principal, Digital Transformation and Management Practice, Public Sector, Grant Thornton
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