6 ways to maximize value from your cloud migration

By following an approach inspired by private equity, CFOs and CIOs can reduce costs and increase ROI.

Cloud computing represents one of the largest non-lending investments a bank will make over the next decade. Looking for ways to get value from your cloud migration? Ask yourself: “What would a private equity firm do?”

By taking a private equity-inspired approach to creating and capturing value, financial services firms can transition to a secure cloud environment without ceding profits to an outside entity. Here are our top recommendations to help you realize a return on your investment in cloud migration.

1.Don’t miss the big picture by thinking of the cloud as only an infrastructure play

Financial services firms need to fully transform their development, operations, security, risk and compliance, and business teams to work differently. Cloud and agile methodologies work together to enable faster development cycles, more efficient capability deployment and improved customer experiences. Teams can more than double their productivity by eliminating and automating the low-value activities they’re using to manage legacy environments. ¹ 

2.Understand demand volatility and patterns (in other words, managing beta)

Internal IT is provisioned for a worst-case scenario, but the cloud lets you pay for only what you consume. The cloud is also not all-or-nothing. The cost of migrating some applications may far outweigh the benefit from running on cloud, and it’s important to plan for what workloads will remain on-premises.

3.Know that optimization doesn’t end with migration

One of the cloud’s biggest benefits is also a major risk: instant provisioning allows for rapid innovation but can also cause demand to grow exponentially. Confronted by millions of product configurations available, many financial services firms have left it to individual business units to manage themselves. 

To measure the benefits of migrating to the cloud, financial services firms should deploy monitoring, software asset management and financial management tool and services to track spend and ramp consumption up and down as needed. A shared governance framework and a set common policies are key to enable innovation while controlling costs and managing risk.

4. Lead from the top

Establish your guiding principles. Set goals for the transformation to the cloud and align incentives and performance measures across business units. Hold leaders accountable for demand and supply targets. 

On the “demand” side, hold business and application teams accountable to their migration commitments. If they miss a cloud migration window, you may have to renew a five- to seven-year facility lease. 

On the “supply” side, hold the infrastructure team accountable for rapidly decommissioning and adjusting their operating model to better monetize efficiencies.

5. Create cost flexibility

Evaluate your current fixed costs and determine what and when those can be turned into variable costs.

For example, if you have an unlimited software license, rather than renew it, you might switch to a per-user rate that is slightly higher but allows you to wind down the cost sooner. Without these changes, you can burden your business case with three to five years of additional fixed costs.

6. Make migration planning a two-way street

Migration planning will primarily be driven by business priority and application readiness. At the same time, look for opportunistic reasons to accelerate efforts and avoid “last mile” stranded costs. 

Trigger events can include upcoming capital investments, renewals, or costly and underutilized shared infrastructure. Including infrastructure, operations and sourcing partners into migration planning provides a full perspective on impact and benefit realization.