Is Your Organizational Structure Hindering Your Cloud Modernization Initiatives?

As seen on Forbes Technology Council.

As cloud modernization has emerged as a pivotal strategy for organizations seeking to unlock efficiencies, achieve scalability and support innovation, few companies stop to consider whether they are structured to reap the benefits of the cloud. Without solid guidance from the transformation team or people who have done it before, any organization will, at the very least, struggle with, make inadequate use of or—in the worst-case scenario—fail at cloud transformation if they don’t have a cohesive cloud plan and roadmap in place.

One of the key findings of our recent report on cloud modernization was that many companies have yet to put core parts of their organizational IT—such as enterprise resource planning (ERP) and customer relationship management (CRM) systems—in the cloud. And it’s not hard to see why.

Organizations lacking clear transformation frameworks, including well-defined roles, responsibilities and timelines, may hesitate to migrate core elements to the cloud. This hesitation often stems from previous projects falling short of expectations, exceeding cost targets or hitting dead ends—issues frequently resulting from poor coordination.

What are some of the warning signals that your organization may be struggling to organize its cloud strategy? Here are a few common ones we see.

1. Technology Fiefdoms Or Silos

Many organizations that lack a clear cloud strategy have trouble looking at the big picture. Instead, projects are driven by various technology fiefdoms across business divisions and departments, complicating decision-making and priority setting.

Whenever you have two different technology teams that then find themselves at odds with one another, it becomes a case of "them vs. us." Ultimately, there may be very good reasons to have separate core technologies in different departments or divisions, but if you get to the point of "us and them," there will be a communication breakdown.

2. Resistance To Change

Companies that undertake cloud transformation in pockets and lack a cohesive structure, including forceful leadership from the top of the organization, often end up with a high degree of institutional inertia and resistance to change. Lacking a clear directive from above, the natural reaction of a well-meaning business unit leader to a shiny new tool is skepticism. As a result, projects drag, more hurdles are raised, people feel left out and fail to learn, and nobody takes the initiative necessary to get the project over the line.

3. Lack Of Business Unit Consultation

Consistently, we are told by our survey respondents that it’s the IT department that is primarily responsible for driving cloud transformation. And that makes sense. They're the ones with the best understanding of the IT infrastructure and the greatest incentive to migrate away from buying servers. Too often, however, decisions are made based on inadequate consultation with the business and require a lot of cajoling and convincing—"stick" motivation, as opposed to "carrot" motivation.

4. Lack Of Governance And Monitoring

Without a clear transformation roadmap, companies will absolutely end up overspending on their cloud initiatives, either due to improper provisioning, inefficient resource utilization or even a lack of visibility across those areas.

Building A Transformation Roadmap

Crafting a clear roadmap for cloud modernization that shapes the vision, identifies priorities and enhances communication across departments is crucial for avoiding all these pitfalls. There is no single ideal structure for the transformation roadmap, and it can depend on a number of factors, including the organization's structure, existing IT assets, geographic locations or business units.

Many of the most successful firms I’ve seen have formalized the cloud transformation team by establishing cloud centers of excellence that bridge tech and business roles and involve voices from across business units. A unified group can be an important driver of necessary changes while respecting each unit's context, avoiding the need for wholesale reorganization.

Another important feature of the roadmap should be an understanding and vision of what you want to achieve in the end. Depending on the size of the organization, there may be hundreds or even thousands of projects that need to be encompassed. It's crucial to decide which tasks are the most important and prioritize tasks into different phases. Inside each phase, it’s also important to figure out which apps and data are part of the project and which lie outside.

Finally, I always advise companies to be clear-eyed about what can realistically be migrated into the cloud and what may ultimately remain within the four walls of the organization. There may be good reasons for maintaining the status quo of certain IT pieces.

Poor Organizational Structure = Lost Opportunity

Beyond the frustrations, delays and financial repercussions that can result from poor modernization structure, lacking a transformation roadmap also has the potential to imperil investment in innovation and new initiatives that rely on the cloud. This includes a wide array of projects focused on accessibility, agility, scalability and security, including artificial intelligence, where data organization, integration and alignment with cloud infrastructure is so often the key to unlocking value.

The first step for any organization struggling with cloud transformation should be to look inward and identify where roadblocks exist. Based on that initial assessment, it may be necessary to seek outside help to determine where best to start, how to prioritize, how the company can best organize itself to drive the program forward and what milestones should be set. With these elements in place, companies can have a clearer vision and more confidently embark on their modernization journey.

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