The Move to Cloud: Are You Getting the Expected Value?

By Chirag Arora and Jim Freeman

The benefits of moving IT operations to the cloud are by now well-documented. Kyndryl’s 2024 State of Mainframe Modernization Survey Report suggests several key reasons that enterprises move workloads off the mainframe. For instance, 45% of respondents cite data accessibility, while 37% cite increased flexibility and 24% cite increased reliability.

Others see benefits in integrating their mainframes with cloud services in a hybrid model. In doing so, 40% of enterprise leaders say they are motivated by increased reliability, 35% by cost savings and 34% by improved performance. Additionally, 45% of enterprises are integrating more with distributed or private cloud environments to meet security regulations.

The answer to the question “Should we move some workloads to the cloud?” is clearly yes. But another question lingers: “Are we getting the expected value from the cloud?”

In many cases, the answer is no: 80% of respondents to a report by Pluralsight say that their companies are having difficulty optimizing the performance of their cloud systems, and only 27% say they can use their cloud infrastructure to drive consumer value.

Let’s explore what leaders of those companies can do and what to consider if your organization is not getting the value you anticipated.

Start by defining value for your organization

Depending on their priorities, various individuals and teams within a company will assess the value and benefits of moving to cloud differently:

• The CFO values ROI: Moving to cloud reduces cost, with lower capital expenses on hardware, software and data center facilities, consumption-based pricing, real-time financial management and numerous other efficiencies.
• The operations team values efficiency: Moving to cloud can make IT resources more flexible, increase standardization and enable a composable enterprise via cloud-native software services.
• The CTO values innovation: Cloud services expand the choice of software, facilitate innovation and provide data analytics that can improve customer experience and boost competitive advantage.
• Application developers value reduced friction: Cloud services can increase agility and speed of application development, enable composable services and automate application life cycle tooling.
• Business function leaders value customer experience and growth: Moving to the cloud facilitates access to business services, accelerates the deployment of new features and addresses the scale of growth using capacity on demand.

With so many competing priorities within an organization, it can be difficult to come up with a single answer regarding whether you are getting the expected value from the cloud.

Questions to help focus

To help build alignment, consider workshopping with your team for answers to the following questions:

• What problem(s) are we trying to solve or opportunities are we going to create?
• What ROI are we getting from this change?
• Is the move to cloud reducing or adding friction to digital workflows?
• How is the move to cloud enabling innovation and collaboration?
• Are we developing digital assets that will help our business?
• Is the move to cloud helping us serve customers and grow?

5 tips to get better value from the cloud

If your answers to the above questions suggest it’s time to make changes, start with these five ideas for getting more value from your cloud technology.

1. Consider a hybrid model

Are your business strategy and operating model suitable for a fully cloud-based approach?

Some businesses go all in on cloud without reviewing if an exclusively cloud-based IT operation is the best fit. For many, a hybrid model that uses both cloud and on-premises technology is the most efficient use of resources.

According to the Kyndryl study, while 96% of enterprises are moving some portion of their application portfolio to the cloud, 89% say that mainframes remain very or extremely important to their business strategy and operations—an indication of the prominence of a hybrid model in the enterprise space.

2. Improve operational efficiency with observability

Cloud platforms allow for easy integration of tools that provide insight into IT operations and allow for rapid changes to improve how your cloud environment functions. Look into unified observability tools to get visibility into performance of applications, infrastructure and networks in a single dashboard. By providing real-time performance data and analytics, the tools enable teams to quickly adjust resources based on demand and enable proactive problem-solving.  

3. Upskill staff for better cloud management

Insufficient staff training is a pitfall for companies that shift to cloud without a comprehensive plan in place. Counter this issue by upskilling staff as they migrate from on-premises services to a cloud estate, providing targeted education and hands-on learning appropriate to each worker’s role. Failing to train staff on an ongoing basis creates risk of wasting resources, as your company will not make full use of your cloud investment.

4. Use FinOps practices to control costs

Without robust management, a consumption-based pricing model can lead to spiralling costs.

For instance, many developers keep their IT environment up and running even when it’s not in use, but this approach with cloud deployments can result in unnecessary usage and uncontrolled spending. An example of this is with non-production cloud computing servers, which can and should be turned off when no one is using them. FinOps practices such as analyzing cloud spending and aligning costs and usage with business objectives are critical to financial governance.

5. Build a financial discipline for your cloud environment

Cloud’s usage-based pricing enables scalability and flexibility, increasing your company’s ability to use fail-fast practices to iterate more rapidly. This shift in pricing model can confuse financial forecasts for IT budgets.

If the CFO is concerned that the cloud isn't delivering the expected ROI, a disciplined financial strategy that outlines usage expectations, outputs and other factors to account for the pricing structure can address that worry.

A well-managed cloud provides many kinds of value

It may be that not every individual or team in your organization will experience an equivalent sense of value from a move to the cloud. But a well-managed cloud environment should prove useful in numerous ways, including reducing cost, gaining agility, improving compliance and positioning your organization to take advantage of emerging technology. These are indispensable outcomes in today’s complex, competitive and pressured IT business environment.

Chirag Arora is Head of Strategic Solutions for Kyndryl Australia and New Zealand. Jim Freeman is Vice President and CTO for Kyndryl Australia and New Zealand.