Why cloud conversions and migrations fail?

Why cloud conversions and migrations fail
Why cloud conversions and migrations fail
Why cloud conversions and migrations fail

The track record for cloud conversions has been poor as research shows that nine out of ten CIOs have experienced failed or disrupted cloud-migration projects and three out of four organizations that have moved applications to the cloud, only to then move them back to their own infrastructure. In our white paper, Journey to the Cloud, we provide guidance and lessons learned from past client mitigations.

The reasons why technology projects in general (not just cloud projects) have a poor track record is due to several reasons: (1) failure to gain adequate internal buy-in particularly from business users, (2) misalignment between teams and (3) inadequate resources and/or budgets. Another major problem area has been that the conversion costs have exceeded budgets, a trend that early adopters quickly realized. The hidden costs have been associated with such factors as:

Resource training and hiring costs

Training costs of internal teams for the new tools and technologies as well as hiring costs (internal and external) have exceeded projections particularly in recent years with market labor shortages

Duplication and lost productivity

The cost of decommissioning legacy systems, changes to operating procedures and running duplicate systems during migration cutovers has been significant

Utilization of cloud resources

Mis-provisioning of cloud resources is an all-too-common mistake, whether that means overprovisioning and underprovisioning

Costs for “lift-and-shift” application migrations

The complexity of modifying applications for mitigation to the cloud is often underestimated resulting in extended timeframes resulting in increased costs and missed deadlines

Support issues

Support issues can derail integrations by consuming substantial time and resources

We have provided additional details related to the hidden costs of cloud mitigations and how to avoid them in our cloud journey blog.

Business Benefits

A key mistake that many financial institutions have made is a failure to obtain buy-in from business users as this group typically does not understand or appreciate the business benefits of cloud infrastructures and how it can play a role in gaining a competitive advantage. Many business users view cloud as an “IT Project” that has little relevance to their daily work responsibilities.

The three primary business benefits of cloud mitigation for our clients within Financial Services has been the following:

1. Hyperpersonalization / Personalization

One of the biggest trending topics in the financial services industry, and among our clients is hyper personalisation. Organizations continue to struggle to leverage on-prem and/or cloud structures to improve the availability of real-time data for instant and personalized customer offers. A clear use case for using embedded AI tools in customer facing applications is the value that can be unlocked by offering customers real-time products, based on behaviors and needs of the customer at that time. This is a clear switch to providing real time products that match needs, as opposed to analyzing historic data and providing a best guess as to the needs of the future. This way of working can only be made possible by leveraging cloud infrastructure

2. Access to enhanced tools and applications enabling advanced capabilities

The accelerated pace of digital change has significantly impacted the development of new products and enhancements to existing offerings. Cloud-native environments offer open APIs by third-party providers, giving banks and financial institutions access to new capabilities without the traditional constraints of legacy systems built 40 years ago. This allows banks to accelerate innovation using common development platforms and centralized applications. The best example of this is software as a service (SaaS), which involves taking existing data and applications and running them in a cloud-based product. Customer relationship management (CRM) and content management (CMS) applications are among the most common examples.

3. Scale, scale, scale

The primary driver for most of our clients for migrating to the cloud is that it offers the ability to scale the infrastructure and position the organization for future growth. Earlier adopters like Capital One led the way and adopted cloud-based strategies early in the cycle. Cloud has enabled Salesforce to experience explosive growth with enhanced benefits for integrated solutions providers like nCino. The benefits of moving to the cloud are no longer debated, now the questions of “how” and “when” are the focus of our clients. We have developed guidance that can be used for any cloud journey.

Key question before starting a cloud migration journey

As companies begin planning for their cloud-migration journey, the first relevant question is: Which applications should be selected for migration, and why? Start with the six “Rs” of migration as outlined in our Journey blog. This framework has been proven for helping organizations successfully plan and execute high-impact cloud migrations. A best practice is to conduct an “app rationalization” assessment or initiative to eliminate costly duplication through overlapping capabilities before moving apps to the cloud.

Randstad and Celerity has helped financial and non-financial clients on their cloud journeys through consulting, advisory and IT Services. Please contact us today to determine how we can help ensure that your journey to the cloud is successful.

Celerity leadership: Jack Leach, Celerity's Senior Client Partner of Financial Services

Jack Leach leads our Banking and Financial Services practice. His consulting experience includes consulting leadership roles with leading firms like Deloitte where he brings a unique combination of industry and consulting experience working for and with top banks and financial institutions within the US, Canada, and Europe. During Jack’s career, he has worked in more than 25 different banks and financial service institutions.

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