Economic Considerations to Become Cloud Smart

Adopting the Cloud Smart Strategy can be overwhelming. You want to modernize your agency by moving to the cloud and deliver mission solutions faster while driving savings and improving security. With so many approaches and providers available, where do you start? A key consideration before you even begin your strategy and planning is your cloud economics:how and why you are going to spend your allotted funding? And what are the potential barriers that can slow down the migration project?

Once you're clear on these two elements, you'll be better prepared to address the challenge of following fairly rigid government processes to obtain what are often very fluid cloud computing assets.

'Economics' means more than 'money'

As a federal agency leader, your economic decisions encompass both financial considerations as well as the value received in exchange for your investment. You recognize that low-cost doesn't always mean economical if its value fails to achieve your agency’s primary mission. High cost doesn't always mean expensive if it provides better value and a higher return for your investment.

All of these considerations are significant as you contemplate how your agency will adopt the Cloud Smart strategy. You need to establish a project budget that covers all the necessary aspects of cloud, but if you've never procured cloud services before, you may not know what all of those aspects are, nor how to estimate their cost. And you'll need to justify your project budget by providing a high-quality return, so capturing and accounting for all costs is imperative to the project's success. You don't want to just spend your money; you want to maximize your economic investment.

Barriers that threaten cloud adoption economics

Two federal agency realities pose unique problems to maximizing your investment: government procurement processes and culture. Each must be considered and accounted for as part of the overall project to meet both the budget and the project's timelines.

Entrenched procurement systems

The Cloud Smart strategy is compelling many federal leaders to change how they think about the procurement process as they strategize a cloud migration project. Rather than simply asking about price, they're now evaluating their project economics through an 'efficiency' lens: "What more can I accomplish with my investment?" rather than "How much volume can I afford to buy?"

Further, because cloud computing services aren't traditional 'assets,' you can't buy them the same way you'd buy a tangible asset. Instead, you'll need to consider multiple variables that come into play in a cloud migration project, then build funding for those variables into your procurement request:

Assess agency systems. Your existing workflows were designed to achieve agency objectives. You'll need to know how those workflows create your agency systems so you can duplicate them or improve on them in the cloud configuration. This analysis takes time.

Align Services and Features to Needs. The cloud offers an almost unlimited selection of unique services and features, each of which will be tailored to address your organization's individual use cases and functions. Choosing those will require inputs from and notifications to not just your architects and engineers, but also your procurement, contract, and pricing departments. Your budget requirements will change based on how you elect to configure and implement your newly acquired cloud assets.

Appraise current practices to cloud-specific opportunities. The cloud introduces concepts that, traditionally, most organizations have not had to consider. Many cloud tools can be configured to perform more than one function, and your opportunity to extend the productivity of your cloud assets across multiple departments may also positively impact your budget and purchasing power.

Cultural challenges

Long-standing cultural norms also pose significant challenges. Understanding and addressing those should be the first step in the cloud migration project, according to Michael Fairless, branch chief of the Securities and Exchange Commission (SEC). Cloud computing will disrupt not just how work gets done, but also how whole systems will function, and its implementation will require many workers to learn new concepts as well as new skills. Further, many agencies are organized as a series of silos, each with individual barriers to improving overall agency functioning. Security and compliance concerns can also trigger fears if staffers aren't aware of how cloud computing offers better opportunities to master both.

Addressing “all-in” costs

The Cloud Smart challenge mandates that federal agency leaders rethink how they procure and implement new agency assets. Consequently, estimating the total cost of procuring cloud computing services to achieve agency objectives should include both an analysis of the cloud's potential to improve workflows and address security concerns (addressing the Smart Cloud objectives), and the 'all-in' costs of modifying current functioning to achieve those gains. These 'all-in' costs include the time and money it will take to identify and address the economic and cultural challenges that will arise as every federal agency moves toward cloud computing.

The actual number of preparation requirements needed before a cloud migration can occur varies based on agency needs and expectations. In addition to these unique ‘federal agency’ challenges, you’ll want to consider in more detail how your agency may (or may not) adapt to the cloud, how you can structure your procurement strategy, and how to ensure your budget includes everything you need to make the migration project a success.

These cloud economics topics will be explored in future latest entries.