4 Cloud Modernization Failure Patterns to Avoid

Cloud computing is commonly referred to as a corporate savior. Early success stories have demonstrated that cloud computing may be utilized not only to improve business operations but also as a vital tool for promoting business growth. Innovative cloud-based solutions for customer relationship management (CRM), e-commerce, and analytics are making it easier than ever for firms to experiment with and pilot cutting-edge capabilities to grow revenue and market share.

These success stories have demonstrated the value of cloud computing to CEOs and senior company executives. According to our research, 86% of CEOs believe that cloud computing is essential to support the results they require within the next 2-3 years.

Despite this, many businesses struggle to create a business case for cloud investments, and up to 30% of cloud ventures fail. The cloud modernization is a new way of doing things, and it necessitates a new set of skills, processes, and technologies for most businesses. Many businesses fail when they apply traditional techniques and existing capabilities to the cloud.

To our knowledge, four major challenges prevent businesses from gaining value:

1. Business and IT misalignment

The great majority of cloud programs are driven by IT departments. The majority of cloud value, however, is often unlocked within company operations. Businesses must adapt their operations to achieve that value. However, CIOs are rarely in a position to make these improvements. Business executives, on the other hand, are hesitant to take on responsibility for these cloud programs since they are unfamiliar with cloud modernization computing (and often with technology in general).

2. Underestimation of technology complexity

CIOs typically underestimate the technological complexity involved in successfully implementing cloud modernization. Cloud computing is undeniably appealing to CIOs who want to “get out of the data center business” and focus on more value-added capabilities. There is also the clear beauty and promise of a cloud-based, massively distributed, event-driven microservices architecture capable of powering the next generation of intelligent applications. Despite the many benefits of cloud computing, businesses are learning that they cannot abdicate entire responsibility for platform and infrastructure management. On the contrary, many businesses discover that managing hybrid systems adds a considerable layer of complexity to platform and infrastructure operations.

3. Over-indexing on organization

Although CIOs recognize the importance of changing their operational model to function in this new cloud environment, they usually treat these changes as a “boxes and arrows” exercise. In other words, rather than breaking down barriers, resolving inefficiencies, and fundamentally changing the way their teams work, they shuffle and regroup resources. The only way for technology teams to stay up with expectations is to drive extremely high levels of automation. Unfortunately, many businesses fail to invest specifically in the automation and AI required to modernize IT delivery to capitalize on these new technologies.

4. Poor financial discipline

Many IT organizations lack the financial management tools required to measure and manage the value of the cloud. According to our analysis, less than 40% of cloud programs have a well-articulated business and financial case. Some IT leaders are less knowledgeable about IT economics and do not understand how operational decisions might affect financial consequences. Additionally, many businesses may lack proper visibility into assets and KPIs. The lack of an analytically driven culture makes determining the value and efficiency of their cloud projects difficult.

Knowing these four failure patterns is the first step toward being a proactive leader capable of leading successful modernization efforts and delivering business results.

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