TCBC releases Cloud Business Models, Metrics and Imperatives Best Practices whitepaper

New report combines input from Canadian experts to provide guidance on engaging non-IT executives in scoping, planning and delivering cloud initiatives

The Toronto Cloud Business Coalition – a group of more than 40 Canadian experts drawn from the IT management, cloud services provider, channel, academic, VC/corporate finance and consulting communities – has issued a document examining best practices used to engage non-IT executives in scoping, planning and delivering cloud initiatives. The document includes input from a working group led by six TCBC members: AJ Byers of JEDTech Group, Sylvia Bauer of CenturyLink, Tracey Hutchison of Cisco Systems, Brandon Kolybaba of Cloud A, Matt Ambrose of PwC, and Brian Ochab of Unity Connected Solutions.

As with all TCBC Best Practices documents, the Cloud Business Models, Metrics and Imperatives whitepaper includes three primary sections: a discussion of the context defining the topic, analysis of the business objectives that shape requirement for cloud business models, metrics and imperatives, and best practices identified by the TCBC working group investigating the subject. A concluding section offers insight into measurements and milestones used to assess success in this area.

Key definitional/context issue

A discussion of how best to position cloud for the non-IT senior executive needs to begin with an understanding of what these C-level executives are focused on, and their involvement with technology. These two issues provide the context for the TCBC best practices analysis.

An important first step in aligning cloud with senior executive concerns is an understanding of the types of issues that dominate boardroom discussions, and the ways that these issues are evaluated. The working group identified nine key issues that senior executives wrestle with; these focus primarily on broad business concerns, such as risk mitigation and time to market for new products/services, but also include some IT-specific topics, such as IT cost management and time to benefit for IT systems.

The inclusion of high-level, dollar-denominated IT issues illustrates two essential truths about senior executives and cloud. The first is the focus on “dollar-denominated” evaluation: senior executives weigh all issues in terms of financial impact, and therefore, discussions of the cloud need to be couched in financial terms. The second is the fact that IT is part of the boardroom dialogue. Traditionally, IT has viewed senior executives as needing education on IT solutions, lacking a sophisticated understanding of how IT might work in a business context. The cloud world, though, requires an appreciation of both IT capabilities and business need – and arguably, business leaders who have grown up with technology understand IT potential better than IT leaders understand business imperatives. As a result, it’s important to view senior management as partners, not laggards, when framing a discussion around cloud.

What can and should these discussions include? The TCBC working group focused on the ability of cloud to bridge operational silos and deliver tangible business benefit. This refers back to the need for “models, metrics and imperatives.” Operating models align cloud capabilities with current or desired processes and methods; metrics demonstrate the financial benefit of cloud-based solutions; and imperatives, which describe target outcomes to customers, staff and other stakeholders, connect cloud with broader corporate objectives.

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The TCBC 2015 Cloud Business Models, Metrics and Imperatives working group. From left to right: AJ Byers (JEDTech), Sylvia Bauer (CenturyLink), Tracey Hutchison (Cisco), Brandon Kolybaba (Cloud A), Matt Ambrose (PwC), Brian Ochab (Unity Connected Solutions)

 

Business objectives and best practices

With this as a framework, what are the business objectives that are most closely aligned with cloud, and what are the best practices in positioning cloud solutions to senior executives? The working group stressed the fact that non-IT executives focus on business rather than technical outcomes. They pursue a limited number of objectives, such as reducing cost, increasing market reach or share, managing cash flow and/or improving profitability. The first step in securing senior executive support for cloud initiatives is to understand specific executive/corporate objectives, and to align the potential of cloud with the key outcomes. For example, a cloud-based sales automation system may promise 30% improvement in sales efficiency. How that solution is positioned depends on the associated corporate objectives – if business leaders are looking to control cost, the solution should be advanced as a means of maintaining revenue with less headcount, while if the objective is growth, the sales automation system should be proposed as a means of obtaining better market performance from current sales force resources.

The next stage in the process is to construct a model that supports a thorough and balanced evaluation of a cloud-based solution vs. alternative business approaches. As is noted above, this is a financial discussion, whose point is to demonstrate how cloud can deliver tangible, measurable improvements in operations. The best practices document quotes one working group member as stating that “the biggest issue is what you include in the math,” making the point that the most compelling demonstrations are those that deal effectively with hard-cost issues, without omitting relevant factors or including hard-to-quantify contributions to value. Cloud proponents may wish to emphasize issues that result from adoption of advanced cloud systems, such as reduced downtime, improved productivity and an enhanced ability to recruit younger workers. All of these are important issues, but may not be germane to the financial analysis.

Once a senior executive has made a financial decision, there is a necessary further step at which the business leader articulates the benefit of the decision in terms of corporate imperatives. This is the appropriate place to raise issues such as the brand and reputation impact of cloud and the ways that cloud-enabled agility benefits the business. Senior executives need to associate new initiatives with longer-term objectives; the TCBC best practices document illustrates many of the ways that cloud aligns with these broader benefits.

About the whitepaper

The Cloud Business Models, Metrics and Imperatives whitepaper is available immediately to TCBC members. Non-members can purchase individual copies for $995, or can instead consider joining the coalition as individuals or as corporate members.

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