In this video, learn how to create a business case for cloud computing.
- [Instructor] Almost all organizations ask for TCO, or Total Cost of Ownership, and ROI, or Return on Investment. This means that a solid business case needs to exist before migration can begin, and its been my experience that you need to create a TCO model that's able to stand up to scrutiny. I've also found this is where IT often falls down. The value metrics by which you will be measured against need to be created and understood. We need to understand operational impact and business impact when approaching this problem.
This means creating three models, including a Pure TCO, which has all of the cost calculations in it. A TCO Plus the transitional costs, or the cost of migration, and finally, the ROI, Return on Investment, which is also including full program costs versus value calculations. It's important that you understand the sources and assumptions of these costs, and how you came to understand these figures. You're going to be tested. As part of this process, you need to create a Current State Assessment.
This is basically how things are now, or as-is. Next, we need to do a to-be, architecture which is what the cloud deployment will look like once we're done. Then, you can create a TCO model, as we described in the last slide. From there, you can create the more formal ROI, as well as create a budget. In order to create a current state assessment, we need to do an Application Inventory Estate-Level Assessment. This means doing a sample application assessment, full estate inventory, and defining application migration approaches that we're going to leverage.
Service levels and operational environment assessment mean that we're working up current infrastructure and operational costs, current architecture state qualities and requirements, and then, current state operational models and processes. The value of agility is an often overlooked area. In many cases, this is the primary value point for leveraging cloud computing. Moreover, the cost of retiring selected applications, infrastructure, data centers, needs to be understood as well.
You will need to figure out the real costs, that include what to do with leftover hardware and software. Also, understand the changes required to maintain service levels, and software costs. And, don't forget about organizational transformation costs. How will that affect the bottom line in the business?
- Types of clouds: SaaS, IaaS, and PaaS
- Identifying the data and applications to move to the cloud
- Migrating planning
- Selecting a provider
- Cloud security
- Cloud operations