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Highlights
- Cloud-led digital transformation is riddled with challenges such as security, governance, compliance, economics, and resourcing. A cloud center of excellence (CoE) can make a huge difference.
- Innovation, advocacy, scale, and governance goals drive the cloud CoE agenda, and the choice of a central or federated model depends on the priority of the above objectives.
- Five key tenets drive the success of a cloud CoE besides technology expertise and contextual knowledge.
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Cloud adoption hiccups
Even as cloud spend is all set to grow at a CAGR of 16.9% and surpass USD 1.3 trillion by 2025, the transformation journey is rife with challenges.
Executing cloud transformation is complex and requires careful planning and change management across the enterprise. Having a business case upfront, along with a robust strategy and futuristic roadmap help navigate the complexities to a certain extent. Even so, post-migration aspects such as security, governance, compliance, economics, and resourcing loom as big hurdles to the goals of reducing inefficiencies and realizing accelerated path to value. Cloud center of excellence in an enterprise plays an instrumental role in addressing these challenges and enabling organizations to harness the true value of cloud.
"Cloud CoE can make a huge difference to the success of cloud transformation by shaping the vision, defining the strategy, establishing the governance, and accelerating transformation."
Impact of cloud CoE
Cloud CoE adoption has increased from 69% in 2017 to 82% in 2021 demonstrating its role in value creation.
Cloud CoE can make a huge difference to the success of cloud transformation by shaping the vision, defining the strategy, establishing the governance, and accelerating transformation. Strong cloud governance is important in addressing the challenges of cloud adoption and managing the cloud as part of ‘shared responsibility’ model with cloud service provider. Companies that have adopted a cloud CoE report that they have benefited in areas of efficiency (53%), accountability (45%), security (45%), governance (43%), cost management (41%), easier auditing processes (30%), and more accurate chargebacks (25%).
The construct of cloud CoE spans from ‘team of experts’ to ‘fully functional cloud CoE with exec sponsorship’, which can enable organizations to maximize their value and reduce risks.
Pillars of a cloud CoE
Cloud CoE acts as a powerhouse that fuels the innovation and growth of an organization.
- It rests on four key pillars of innovation, advocacy, scale, and governance.
Cloud CoE models
Cloud CoEs can adopt a central or a federated model.
A central model, where the cloud CoE operates through a central function, is particularly useful for smaller organization to drive pace. In a federated model, typically in larger organizations, the local cloud teams work closely with their respective business or functional units and collaborate with the central CoE.
The debate between adopting a ‘central model’ or a ‘federated model’ for cloud CoE continues and is never ending. It’s not ‘one size fits all’— organizations need to evaluate the model that is likely to work best for them and continuously adapt and evolve to improve the maturity of the model.
Cloud CoEs can have a central or a federated model
Key tenets for success
Success of a cloud CoE and therefore that of cloud transformation depends on five key tenets.
Being relevant
A cloud CoE must stay relevant by bringing a convergence between the long-term objectives (top-down) and immediate priorities (bottom-up), leading to a strong foundation that supports future strategy and mitigates risk and rework.
A CoE built with a top-down execution mindset can outline policies, establish guardrails, and ensure alignment to business objectives. But if its focus is only on policy and governance, it risks losing significance and support from the ground teams performing migrations.
Top-down execution
Staying connected by engaging stakeholders
A cloud CoE must seek representation and involvement from business for its operations. This helps in awareness of standards and policies to improve buy-in and compliance to the cloud transformation initiative.
Building a strong team
Various skills ranging from cloud experts to business specialists are required for the effective functioning of cloud CoE. A holistic approach to source multi and hybrid cloud skills from external partners and conducting training sessions to upskill existing workforce helps to address the situation.
Continuously innovate to make a difference
A cloud CoE must invest time and resources to continuously navigate through the market to identify digital capabilities that can be leveraged to innovate and build ecosystems of the future. Connecting the dots, a cloud CoE fosters environment for business and engineering teams to explore, experiment, and innovate in bringing the best of the outside world within the organization’s context.
Transforming culture
Cultural transformation is an on-going process and a cloud CoE should anchor this in the organization with support from executives. Culture transformation involves communication, collaboration, and upskilling the existing workforce through formal training and informal learning through communities of practice. A cloud CoE must engage the security and risk groups within an organization to understand the hybrid landscape and ensure identification and mitigation of risks. Lastly, it is the cloud CoE’s onus to create innovation opportunities to motivate the workforce and catalyze cultural transformation.
Conclusion
An outside-in holistic perspective and recommendations help to eliminate the subjectivity in following these best practices and benchmark the organization with the competition. Cloud technology experts with pan-industry expertise and deep contextual knowledge of your enterprise can help you set up a cloud CoE that can meet your business priorities.
