Keeping the lights off: Why the Cloud demands a new operational mindset
With Cloud computing now firmly entrenched on the C-suite agenda as a way to cut costs, create new digital opportunities and drive operational efficiencies, many of Africa’s largest businesses are shifting to a fully Cloud-based or hybrid Cloud IT environment.
In most instances, leaders and finance teams are eager to harness the oft-cited benefits of the Cloud – chief among them the scalability and agility that it can offer. And particularly with margins tightening, the pay-per-use model that most Cloud subscriptions offer can become a no-brainer in comparison to the high fixed costs of on-premise servers and the associated hardware.
Yet ironically, many businesses that have migrated some or all of their IT functions to the Cloud are failing to capitalise on the very elements that prompted the move, namely: scalability, flexibility, and cost-effectiveness. Indeed, many Cloud environments are most often running in an inefficient and costly manner due to the operational methodologies not transforming with the technology.
This failure (or inability) to capitalise on and truly leverage the Cloud can arguably be attributed to the fact that IT teams and leaders are applying old mindsets and attitudes to what is a fundamentally new way of approaching enterprise IT. Resources are being wasted, precisely when leaders are looking to be cost savvy.
So, where is it going wrong?
A Cloud model that’s fit for purpose, in real-time
Traditionally, IT teams received a brief from business leaders based on the timeline of the project, this would probably be at the top end of the requirement to ensure no surprises. IT teams then get to work to spec the hardware etc. which also would be ‘specced’ at the top end of the requirement as no CIO wants to go back to business for more money halfway through the project.
This “double-dipping” resulted in datacentres full of machines that we are running at low utilisation, and never being used to their full capacity.
In the world of the cloud, flexibility is inherent and the ability to consume more capacity is incremental in line with the project build-up. There is no longer a need to fully spec a machine to cater for the three-year project upfront, but rather adopt an approach that consumes resources in line with the project’s growth and expansion.
IT and business need to shift to a mindset and the business process of designing the IT requirement that reflects the flexibility that the cloud model provides. This would result in significantly higher usage of the IT asset, in real-time, and as such, a significantly higher return on a lower spend.
To achieve this, the feedback loop between IT and Business needs to be redefined - with IT being much clearer on the impact of the business decision on the ongoing operational costs. Businesses can have it all up front and on all the time but they need to understand the cost of doing so and the new options available to them.
New technology, new operational measurements
Without a doubt, one of the most costly mistakes that IT leaders and teams are currently making is to apply old measurements and indicators to new technology strategies - leading to massive inefficiencies and the failure to benefit from the all-important financial agility that Cloud computing can offer.
By way of example, when IT teams were working with on-site servers, they would almost obsessively track uptime – recording the hours when a server went offline and then providing monthly percentages that tracked the amount of system uptime that was achieved. Here, the goal was to be up and running 24/7 and to fight to ‘keep the lights on’, so to speak.
However, with the migration away from on-premise servers to Cloud-based IT environments, this ‘uptime’ mentality no longer makes financial (or technological) sense – because the purpose is to be able to scale services and usage up and down according to the actual business needs.
In other words, efficiency becomes about learning to shut down certain environments that are running in the Cloud when the business does not require them. Instead of keeping the lights on, the new obsession should be to ‘keep the lights off’ in the context of only using Cloud services when they are required.
In this way, the digital transformation ‘dream’ (and financial agility) that Cloud computing offers can truly be realised.
Reimagining the relationship with IT
Many of the existing failures to leverage the cost benefits of the Cloud can be corrected by changing the way that leadership and finance teams engage with IT teams.
To begin with, these two spheres of the business need to be working more closely together to understand what the business requirements are, and to introduce a more detailed, granular understanding of Cloud costs – and where usage can be scaled up and down according to business requirements.
All too often, businesses are great at scaling up usage when there is growth, but there is a distinct inability to scale down or ‘shrink’ the services when appropriate. The onus is on both executive teams and IT leaders to begin obsessing about the on/off switches in Cloud environments - where it makes sense - and asking key questions to ensure that no wastage is occurring.
Critically, both teams need to be asking the tough questions about why they need the environment on vs. off. When a business leader demands the system is up 24/7 for that one moment when they need a report at 3am in the morning, they too should be expected to explain where the money is coming from to pay for that luxury. Although the Cloud offers infinite expansion opportunities, the resources that pay for the Cloud are still scarce, and should not be wasted.
Getting this new balance and communication right between business and IT is the first critical step in leveraging the cost benefits of Cloud. Adjusting the business process to meet the new financial model that Cloud presents is a huge opportunity for business: if not managed proactively, it can become significantly more costly than just a missed opportunity.
We switch off the tap when leaving the bathroom, we invest millions in energy efficiencies to reduce cost, and the Cloud should be no different - pay for what you use, not for what you didn’t plan to switch off.
With more and more pressure on leaders to innovate whilst also being savvy about their margins, perhaps it’s time to start ‘keeping the lights off’…in order to keep fulfilling their core business purpose and vision.