Cloud adoption: would a previous experience with traditional outsourcing make it easier?

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  • Definition of the operational model to be deployed

o             How the current model (sole sourcing or coexistence of a small number of providers are typical traditional outsourcing models) will be affected as a consequence of cloud adoption?

o             Which progression rate will be planned to deploy the new operational model, considering that typical cloud scenario shows tens of providers?

  • Provider(s) selection

o             Which typical selection criteria on traditional outsourcing stay relevant on cloud scenario? Among them, we can name: proven provider capacity, robustness and innovation of solution proposed, up-to-date technological infrastructure, available skills, delivery experience, list of customers and customers satisfaction.

o             Which “new” typical selection criteria on cloud scenario (sometimes associated to a certain cloud market immaturity) should be added and which is their relative priority to the “old” relevant selection criteria? Some we could name are finance and structural robustness, available infrastructure geo dispersion, ability to integrate with competitors’ solutions, security and compliance infrastructure and procedures.

  • Contract terms and conditions negotiation

o             Which previous critical negotiation factors became irrelevant on cloud scenario? Among them, we can name assets management and the transfer of human resources from the buyer to the provider

o             Which negotiation factors keep critical, although they should be negotiated in light of the cloud specificities? We can name: service level agreements and associated penalties, services charging metrics, volume consumption verification, contract cancellation and conflict resolution procedures.

o             Which “old” negotiation factors became especially critical on cloud scenario? Some of them would be: legal contract jurisdiction, responsibility concerning security and compliance issues, consequences concerning service failure, data integrity and recovery

  • Services transition planning and deployment

o             Which previous factors remain relevant on cloud scenario? Some of them could be named: joint planning and limits of responsibility between buyer and provider during transition, transition team definition and communication procedures between parties during transition

o             Which factors became critical on cloud scenario? Some of them would be the integration of services provided by a big number of providers and the dissemination among users of information concerning charging and additional services request

  • Contract governance and relationship among all stakeholders

o             Which “old” elements keep critical on cloud scenario? We could name a few: structuring of buyer governance function, selection of skilled governance team components and definition of executive and operational meetings periodicity and agenda

o             Which additional elements appear as critical on a cloud scenario? Among them we could name: definition of tools, skills and procedures needed for a cloud management function, aiming at agility, effectiveness and automation during new deployments, additional services request, cost control and performance monitoring

As shown, a previous experience on a traditional outsourcing project lets organizations anticipate how to deal with many of the aspects involved in each step of the adoption of the cloud alternative. The lessons learned along this previous experience permits a solid base be built for cloud deployment, over which all specific issues of the cloud scenario must be mandatorily and adequately considered.

Alfredo Saad has been acting on IT Strategic Outsourcing Services area since 1997. In 2006 he published the book “IT Services Outsourcing” (Brasport Publishing House). Risk Manager of all IBM Strategic Outsourcing contracts in Brazil (2009-2014). From March 2014 on, he has been acting as an independent consultant, lecturer and writer on IT Outsourcing as the principal of his own company, Saad Consulting.

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