Moving From Traditional Outsourcing to Cloud-Based Hosting Models

Blog /Moving From Traditional Outsourcing to Cloud Based Hosting Models

As a service provider, we are witnessing an unprecedented demand to migrate our enterprise clients to cloud-based hosting models. A cloud-based IT environment can be an opportunity to drive growth, innovation, and financial transformation — especially within healthcare, commercial, and banking and financial services. It enables organizations to be more connected with their business objectives and enable easier adoption of the latest technologies such as digital, social, mobile, analytics and the Internet of Things.

However, full-scale adoption is easier said than done, as cloud-based infrastructures require a complete shift in the way most organizations have managed their IT environment up to this point. Here are six areas you need to consider when transforming your IT environment.

1. Think of cloud as a powerful tool to enable business strategy. When you’re under pressure to show results with a cloud strategy, the answer is usually engaging an expensive consulting firm to develop a roadmap or moving a few workloads to public cloud providers. As we discussed in our previous post “Cloud: An Enabler of Business Growth,” cloud implementations can drive tangible business benefits and value. Successful cloud adoptions focus on business strategy first and look at using cloud as an enabler, not as simply an IT tool.  

2. Rethink risks and contractual vehicles. Traditional IT contracts are typically not suitable to take advantage of the benefits of cloud-based models. Public clouds are flexible, consumption-based utility models, but tend to be limiting when it comes to contractual risk clauses such as liabilities and indemnifications. Traditional hosting is typically just the opposite. Hosted private cloud offers the best of both worlds with flexibility and reduced risk. The key is to determine which hosting option is right for all your needs (business and IT) — or if you want to use a mixture through a hybrid model. And while traditional models for ticket-based, manual provisioning cycles still get the job done for stable workloads, they need to be augmented to support self-service provisioning use cases. Introducing agility into the contractual process will require you to rethink your service-level agreements and security, as the responsibility of managing workloads shifts from provider to customer. At NTT DATA Services, we have been evolving our hybrid IT contractual framework to support these issues.

3. Challenge the norm of running your own data center. The true benefit of cloud is realized when you don’t have to manage your own data center. This is where the cloud service provider becomes an extension of your in-house IT to provide ongoing innovation and continuous improvement via underlying capabilities. While in some cases there might not be an option other than operating your own data center, strict compliance and security requirements can be met using hosted private cloud. And the physical assets can be hosted or co-located nearby, enabling a gradual transition. This way, the asset-lite adoption can start without waiting for an end-of-lifecycle event.  

4. Taking a step toward cloud starts with understanding what you have today. You need to have a clear understanding of your current IT environment, including infrastructure, operations and workloads, before you begin. At NTT DATA Services, we work with clients to create a comprehensive view of a future-state model to demonstrate its substantial benefits. This can take anywhere from one to four weeks, providing an in-depth comparison of as-is and to-be scenarios. If you don’t have reliable or up-to-date current-state information, an assessment is recommended before beginning any cloud engagement. Assessments result in recommendations for optimizing the existing environment for both near- and long-term improvements.

5. Migrating workloads to multiple clouds requires experience and a surge of resources. Typically, next-generation solutions will involve a combination of hosted or managed private cloud, public cloud and physical hosting to provide the best fit for each workload. Once the use model for these different hosting platforms is determined, the complexity lies with migrating workloads to the end destination. In addition to working knowledge of different end states, you need to perform a knowledge transfer to the migration team to help them understand current workloads and design new environments that provide cloud benefits. In most cases, traditional workload deployments require considerable work to take advantage of underlying cloud platform capabilities as it’s difficult to see the benefits of cloud using lift-and-shift deployments.

6. Rethink your IT organization. Adopting cloud services is a great opportunity to move the focus away from traditional IT domains (such as Windows/Intel, networking and storage) to align more closely with business units. We often see new organizational structure evolve as our clients reevaluate current models. Over the course of client engagements, we’ve seen a few common strategies for integrating your business units successfully emerge, including:

  • Create IT liaisons for your lines of business that are centered on workloads
  • Shift skill sets to architecting new, cloud-based solutions and embed them in your application teams to support continuous innovation and DevOps 
  • Create functional expertise to understand capacity utilization and cost optimization for each line of business’s specific technology needs 
  • Invest in business intelligence and data analytics to derive value from big data 
  • Build centers of excellence for your security practice to continually evaluate and streamline workload placement decisions by risk profiles and importance

As Jack Welch, former chairman and CEO of General Electric, once said, we need to “change before we have to.” And transforming from a traditional, asset-heavy model to a more agile, asset-lite, cloud-based model will help you do just that. But you’ll need to reevaluate current engagements with your service providers first — make sure you’re partnering with a service integrator who understands the nuances of next-generation cloud-based outsourcing models. At NTT DATA Services, we’re committed to helping you realize the value of cloud hosting.

Post Date: 8/10/2016

Steve Bodnar

About the author

Steve Bodnar is the Managing Director of NTT DATA Services Private Cloud Service. This includes product development, engineering, and operations of NTT DATA Services market leading private cloud service and hybrid cloud enablement.

Steve has 20 years of IT Services experience across business strategy, M&A, product management, business transformation, application development, and infrastructure management at NTT DATA Services, Ernst & Young, and Accenture.

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