Building a solid business case for cloud migration
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Learn how to create a compelling business case for a large-scale migration to AWS. We present a framework and tools for creating your business case, and guidelines for using AWS services to maximise value and optimise cost for migrations to the AWS Cloud. Learn a new way of thinking about cost that includes factors such as automation, new technologies and organisational change. Speaker: Andrew Boyd, Enterprise Account Manager, Amazon Web Services
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Building a solid business case for cloud migration
- 1. © 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Andrew Boyd – Enterprise 3rd May 2017 Building a solid business case for cloud migration
- 2. Executive Sponsorship Experiment Education Hybrid Operations Program ROI and Plan Cloud-First Strategy Organizational Change Making it Real Elements of a Successful Cloud Journey
- 3. Over 60% of projects that you work on this year will fail… http://www.cio.com.au/article/582055/why-half-your-projects-will-fail-year/
- 5. 90% of large projects fail… But, 76% of small projects succeed. http://www.cio.com.au/article/582055/why-half-your-projects-will-fail-year/
- 6. Invest now for future savings and benefits
- 8. Start with the why?
- 9. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 10. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 12. Base platform Network costs Hardware – server, rack chassis PDUs, Tor switches (+maintenance) Software – OS, virtualization licenses (+maintenance) Facilities cost Hardware – storage disks, SAN/FC switches Storage admin costs Network hardware – LAN switches, load balancer bandwidth costs Network admin costs Server admin, virtualization admin, OS Admin Space Power Cooling Facilities cost Space Power Cooling Facilities cost Space Power Cooling Server costs Storage costs 1 2 3 IT Labor costs4
- 17. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 18. ≠
- 20. The right fit Instance type Instance family
- 22. Service optimisation Non optimised services optimised services
- 24. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 25. Migration costs Network costs Hardware – server, rack chassis PDUs, Tor switches (+maintenance) Software – OS, virtualization licenses (+maintenance) Facilities cost Hardware – storage disks, SAN/FC switches Storage admin costs Network hardware – LAN switches, load balancer bandwidth costs Network admin costs Server admin, virtualization admin, OS Admin Space Power Cooling Facilities cost Space Power Cooling Facilities cost Space Power Cooling Server costs Storage costs 1 2 3 IT Labor costs4 5 Migration costs 3rd Party tools – network discovery, migration, storage, DB Labor costs – FTE, consultants Migration scenarios
- 26. Additional perspectives on the cost of change
- 27. Business alignment Governance and policy Operational integration Continuous deployment Talent acquisition & development Cloud CoE Cost allocation & financial control Partner & vendor management DevOps Cultural transformation Asset management
- 28. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 29. Every change is an opportunity for innovation
- 30. Enable the business Lower the time spent on building and supporting infrastructure Dedicate more IT resources to innovation Concentrate on new business initiatives and projects
- 31. Business benefits you can quantify Increased agility
- 32. Business benefits you can quantify Workforce productivity
- 33. Business benefits you can quantify Operational resilience
- 34. Business case components Cloud comparison Cloud optimisation Cost of change Business value
- 35. 1. Keep it as simple as possible 2. Use the business case as a catalyst to change the way you work 3. Prove benefits every step of the way
- 36. Thank You amboyd@amazon.com lets chat at the AWS stand
- 37. Remember to complete your evaluations!
- 38. © 2015, Amazon Web Services, Inc. or its Affiliates. All rights reserved. Thank you!
Editor's Notes
- 1 Mins (1) Thank you Anita. Hello everyone, what a great audience we have today. So I am Andrew Boyd and I work in the Amazon Web Services Enterprise team. My focus in this role is to help Enterprise customers who are just staring their journey to cloud to realize the benefits of cloud adoption as quickly as possible.
- 1 min (8) When we look at the cloud journey, this really fits into the executive sponsorship and Program ROI and planning phases. The reason I am here to talk to you today about building a solid business, is that I see customers spending a lot of time developing a business case and it’s a key blocker and area where spend a lot of time trying to get right. And I want to help you get through this process as quickly as possible and get delivering results. I’m convinced!! I’ve seen the benefits for businesses in migrating to cloud and using this to transform their business and they way they work in delivering not only the way you work, but also the way you deliver for your customers. Look at some of the amazing examples of businesses using cloud to transform their business. GE oil and Gas moved to cloud, in the 18 month project to do so they made a 52% reduction in the Total cost of ownership. Yes that’s right a hundred year old traditional business saved over 50% of their costs. But at the same time they had a 98% reduction in P0 / P1 incidents and were 77% faster to deliver business applications. Yup the benefits are real. Now I’ve worked across start ups and enterprise and have a bit of experience in how you might build these business cases across different organizations. We are all in the same boat. We’re prioritizing where to spend the money to get the best return for our investment. And when you look at that if you have no regard for time or for money you could solve any problem, but you would probably solve it in a really uninteresting and expensive way. So then lets use this session to talk about how do we leverage cloud to build elegant cost effective customer solutions that drive our business forward. So how many of you have built a business case for a project in the last 24 months… Wait Cool so were in the right place and thinking about how to do it better. So then I’d like you to raise your hand if the project that the business case was about was delivered on time and to budget meeting the business outcomes? Wait
- 1 Mins (3) So over 60% of projects that you work on this year will fail. That kinda sucks doesn’t it? Imagine if surgeons in hospitals had the same failure rate? We would not accept that right. So first lets dive into what we mean by fail. Well in this instance the measures are pretty clear. Do you deliver the planned outcome or features on time time and to budget? When you look at the averages. In the data behind this we start to see that on average only 69% of features are delivered, with an average cost over run of 59% and a whopping 74% over run on time to deliver. I’m sure lots of us have experienced those projects that don’t really deliver the results we’ve envisaged in our time. And I’m not sure about you, but to be honest I see a lot of projects not even going back at the end to measure their success.
- 1 Mins (4) So HOW do I build a business case to move to cloud and more importantly, one that doesn’t fail? Well first of all don’t worry! Today I’m going to walk you through the process of building a cloud businesss case in all of its complexity, but Relax this isn’t one of those ridiculously hard to solve problems that requires rocket science and millions of dollars to fix. There really is a simple formula that allows you to look at the way you plan for your cloud migration, build the right business case and deliver the outcome. And we are here to support you every single step of the way. We have helped millions of customers so far realise the benefits of moving to cloud. So lets break this problem down. What I want you to first think about is how do I best build a business case that is sucesful? Consider this data point
- 2 mins (6) When we dig deeper into projects fail we can see a stark statistic. 90% of large projects fail, but there is light at the end of the tunnel here as 76% of small projects succeed. Now a large project in this scenario is one where we invest over $10m in labour compared to a small project which has Less than $1m in labour. So what this really tells us is that we’re better of breaking large projects down into small ones! Seems logical right, the shorter and smaller the project the better we are able to forecast into the future and deliver what we say. So what sould you do. Focus on smaller projects, To test and learn, To measure and interate. Ok so that’s my advice – wherever possible avoid a big all encompassing business case. Build a case for a proof of concept. Execute an proove the concept or learn and iterate… Get FEEDBACK from your customers. Wherther they’re internal or exteranal and iterate again. It’s the most cost effective way, by iterating and improving you reduce the latency in the cystomer feedback loop. You create small projects, that have more chance of delivering what youre customers want and you suceed at more of them. So if I stop there and you go and do that. We’re done ok.. So if you feel that’s achievable in your organization right now, please go ahead and get going. But if you're like most businesses, you need a funding bucket to draw down on and you need to secure resources to do anything and so that doesn’t help you. So lets find a way to help you too… Lets discuss the components of a business case, highlight what typically gets missed and give you a blueprint of things to add to your cloud business case.
- 1 min (7) OK so you have got to build a business case, so lets start with the basics A business case is trying to secure an investment now to deliver future savings and benefits. So going back to my last point, you want a funding bucket to draw down on, could you do this? Literally like don’t go for a project business case, but instead ask for an innovation budget, to experiment and innovate. For micro investments like this sometimes a traditional business case is not the right mechanism.
- 1 min (9) When we look at the most successful they have a common set of characteristics. They are small and targeted with measureable outcomes They are ??
- 2 mins (11) Why are you building this business case, Who is it for? Are you seeking project funding? Do you even need a business case? Prioirtise WHY you are doing this – do you need to save money as quickly as possible. Do you need to launch more innovative products to keep up with the compeition. Use these whys to shape how you build the business case Is it developer productivity Is it system reliability DEFINE THE SIZE OF THE PRIZE WHETHER YOU HAVE A DIRECT board level of exec directed to reduce cost Requirement to move quickly and enter new market Re-invent and adress an increasing competeive threat Or in qantas case whether you’re looking at an opportunity to do all Recuce cost of fuel Open up net new routes for flights as a differntaitor And offer a more personal customer experince All theese are valid why reasons… Close – you can not underestimate the importance oF WHY your doing tis as change is hard and unless you truly believe in the why you’ll be a statsistc
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- 1 min (13) So lets look at base operational platform – its that good old apples for apples not apples for oranges comparison that everyone loves to see. But before we do this I want you to know… Apples for Apples or a lift and shift migration to cloud leaves xx% on the table! But it can still be pretty compelling. Even just to compare the cost of your data center to cloud. So it’s a good first step CHANGE TO APPLES TO APPLES THIS SERVERLY UNDER ESTIMATES THE CHANGE THAT Dilbert
- 1 min (16) A Base platform analysis typically includes: Comparing the costs of running an infrastructure environment or specific workload/application on-premises or in a co-location facility to AWS Calculating the cost of migration - Assuming a lift and shift And we make this easy – for simple projects on our website we have the ”TCO modelling tool” But if your doing a project – call us – email us – we’re here to help Now for some projects you might do this analysis – and stop. Lets go back to what your objetives are. If you need to move as quickly as possible into cloud to bank those savings – you might do this analysis and its so compelling that you’re done. But if we go back to our energy company example – well its not enough – how does this help me improve relaibility, get better at managing the profit between the buy and sell price of energy and deliver new ways to engage my customers that reduces the impact of disruptive pleaysers… Or maybe even this doesn’t stake up in terms of savings… so lets consider apples for oranges shall we!
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- 2 min (19) Compare your current on-premises environment to your future state re-architected AWS environment, NOT a replica of what exists today. Image Clayville Not apples to oranges – Comparing a horse to a car not a car to a car! GUYS come on get real. JUST COMPARE THE COST PER GB.. YOU ARE MISSING THE POINT THIS IS NOT AN INFRASTRTCURE BASED TCO MODEL… WE ARE FACING THE BUSINESS CHANGE IN A GERNATION BUSINESSES ARE BEING DISRUPTED FASTER THAN BEFORE DON’T UNDERESTIATE THE COMPLEXITY WE’re not comparing the same sized fruit that’s the same size and eight and a diffret colour an yeah takeste a little different.. Don’t under estimate this..
- 2 min (21) Amazonian language that says and speak personally – when I speak to my customers – the universal truth is we want you spending the least amount possible on our platform… but that doesn’t mean its easy So let me take you through the commercial leavers that e have that we have to help optimise I don’t want you to spend 1 cent more than you have too… Universla truth in retail is that everyone wants a lower price and at amazon we want you to spend lowest possible on platform to reap the most valeu I’m going to start with price – Many different commercial models that can be used The thing that makes it more tricky Even for a single application you may use more than 1 model So its important On-Demand - it’s the most expensive way and it is also the most flexible – useful for pocs sprint sor peaky and for that youre willing to pay a premium RI’s – long running 24x7 applications – databases always running all your app servers and a proportion of your web servers too the bare minimum in off peak load – you should be using RI’s to reduce the cost by around 40% when compared to RI.. Dedicated – BYOL and the fact that youre not sharing the host with another tennant – which can sometimes be a requirment in a government type scenario but from a commercial perspective with ISVs that don’t support multi tennancy Spot – its is my favourite but also complicated. It’s the model where you can bid on unused capacity in aws region and get up to 90% discouunt… The trade off is that you could lose that at any point. So youre not running produciton or SAP on tht, but you may be doing large scale computtional bathc processing throiw huge compute at a problem in order to increase decision agility… GENERALLY WHAT WE FIND IS A MATURITY – MOST MATURE CUSTOMERS ARE USING PR Data point spot in 2017 vs 2012 Reflection of mature customers moving to highly optimised… And the
- 1 min (23) At AWS you have lots of choices, many different families and size model. We have a t-shirt model – XXL Auto scale increments…. Name like an M or an X2 or whatever
- 2 min (25) Auto scale – smaller instances Incredibly opowerful FREE as part of the platform SCALE UP when you need it and MOST IMOORTANTLY SCALE DOWN WHEN YOU DON’T CUSTOMERS CAN REAP ENORMES SAVINGS SCALE DOWN during OFF Peak If you tie to fit then you can make sure 2 small is the same as 1 medium – very linear scale… Just cos you need a bigger box… scale
- 2 min (27) We released over 1000 features and services last year Many of these can completely redifine how you can solve a problem in the Lambda moving to servlerless Replacing small EC2 servers to process cron jobs removed and can be replaced with a serverless archietcture Replace DB with RDS reduce Database admin
- 1 min (28) LOOK AT THESE 4 THINGS EVERY 90 DAYS Create a cadence of REVIEW 1 2 3 4
- 1 min (29) SO now we have the cost to operate in the cloud… in an optimised and un optimised mannor How do we get there?? Self fund - we see that Sometimes youre going to have to ask for an investment Size change and scope You may end up both Early stages self funding projects and move quicker May be a point where you consider a larger trnasformaiton Where you may need to account for cost of change What are some of the things you consider In many cases people think its migration Have you considered enablement of people Investment in change of culture Not necessarily a hard monetary investment sometimes they an investment in time communicaiton and people….
- 1 min (30) So how do you do this. Engage a partner Engage Amazon pro serve Lets get some tools in to automate We can give you some basic costs per server Way you can help reduce these things Wide variety of partners to help accelerate the outcome It may appear more upfront actually over term outcome is reaped quicker I sat at reinvent and loads of execs not one of them said they had wished tehyd done it slower!! Buy in from business Take a look at the market place Pay for the duration of the project
- 1 min (31) Value of experience Cloud adoption framework Across the many transofrmations what we have found is… Becase the changeyou need to consider these things Here are the things our PS team look at when they drive transofrmaiton
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- 0 min (34) So ow you're in the cloud WHAT ELSE But what are the other benefits we need to consider?? How do we deliver Business Value
- 1 min (35) Tangible cost savings associated with migration to the cloud are not the only benefits to be gained from your cloud transformation. Quantifying the business value that the cloud can have on your business and your bottom line can lead to a solid business case, thus helping to create a greater urgency to accelerate your cloud journey. Add a statistic here
- 3 min (38) This is where we can spin up and experiment with new business infinitives AGILITY - HARD TO MEASURE Rapid and less expensive experimentation Faster application development Faster business decisions = faster time to market Individual task productivity Self-service culture Increased automation Developer satisfaction = higher retention Improved system performance Less downtime Improved security posture More incremental changes = reduced bugs CUSTOMER EXAMPLES
- 1 min (39) So now to recap today we’ve discussed a few things 1 – build a cost comparison to your lik
- 1 min (40) Keep it simple – build a 1 pager for the execs. If you do just that and nothing else you will be building a business case with more chance of success. Not one of those projects where everyone rallys around to say how great it was, but you all know that it could have been better. One of those projects that are literally the proudest moments of your careear! Ok so now lets get into the detail of the business case
- 40 WERE HERE TO HELP WITH YOU ALL THE WAY! Partners to team Many other orgs that have gone through change that you can look to to show that not only is it possible BUT THE BENEFITS ARE REAL!
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