We often recommend that enterprises have a clear idea of what they hope to accomplish by moving to the cloud. They can then set up success measures that will both guide them and allow them to measure their progress. In this blog post, Nurani Parasuraman discusses how best to track the effectiveness of cloud adoption. Mark
Some organizations have been more successful than others at realizing the value of cloud services. Organizations have long been using Key Performance indicators (KPIs) to measure the health and progress of business endeavors. What makes KPIs to track cloud adoption unique? How do we interpret and use them to make decisions and steer clear of pitfalls? In this post, we’ll look at the challenges and best practices for measuring and tracking the effectiveness of cloud adoption initiatives.
Choosing the wrong KPI can lead to undesirable outcomes. A year into one company’s cloud adoption, they realized that the quality of the software being delivered hadn’t really improved and developer productivity was nearly identical to on-premises. Over 80% of technical employees were cloud certified and yet the results weren’t impressive. What was going wrong? Well, first – training hours and certification counts are, what we call “vanity” metrics. While simple to measure, they provide a false sense of progress. These measures did not really track how the company was progressing towards one of their key goals, which in this case was to improve software delivery quality. A better metric would have been the “software release error rate”, which, when attributed to a team or a developer, would have provided actionable insights to improve quality. Additionally, another desired outcome was to decrease the time it took to provision infrastructure to the software development teams. It turned out that the company was following the same burdensome on-premises workflow requiring multiple approvals to request, provision and deploy infrastructure. They were not effectively leveraging the secure automated tools (“infrastructure as code”) that cloud provides which can significantly speed up provisioning infrastructure. Once the company began using the right KPIs and tools, they were quickly on their way to realizing the benefits of their cloud investments.
This example illustrates two principles that are critical to successful cloud adoption. First, it is important to choose the right KPIs to track progress towards desired objectives. Second, operating in the cloud requires companies to re-think and adapt their on-premises processes to take full advantage of the cloud’s capabilities.
The cloud is not a strategy in itself; it’s a remarkably powerful tool for accomplishing business outcomes. A common error is to think of cloud adoption merely as a “technology” initiative, while your real objectives are to improve business agility, operational resilience, and staff productivity and to reduce costs. In this case any attempt to measure progress of cloud adoption has to be broader than just IT operational metrics and should be tied to your primary business objectives. But, are the business objectives clearly known and unambiguous? Unfortunately, it is common to find that leaders have strong but conflicting opinions on cloud adoption objectives. Additionally, each enterprise is complex, unique and the pace of transformation and maturity will vary. What may work in one Organization may not be appropriate for another. For example, a family-owned company that intends to be in business for the next 100 years will have different KPIs than a private equity firm that intends to resell the same business in a few years.
Cloud computing has prompted a shift in business practices. Infrastructure capacity has shifted from “fixed” to “unlimited” capacity and scale. Hardware, software and access can be provisioned quickly with automation. The cost model has shifted from fixed to variable.
