Assessing Cloud Migration ROI for Your Organization

Migrating systems, workloads, and data to the cloud is a considerable undertaking, but it provides many benefits when done properly. As with any project that incurs a significant expense, organizations considering cloud migration need to project their return on investment.

How can you assess your cloud migration ROI? There are various factors to consider.

How To Assess Cloud Migration ROI

When evaluating your ROI, you must consider more than cost savings. You also need to think about how much benefits you receive from a successful migration, such as optimized business processes and agility, are worth.

If you’re thinking about migrating to cloud-powered solutions, now is a great time to make other updates to improve your organizational efficiency. You may decide to change software applications to meet your needs better or revise workflows, for example.

1. Current vs. Cloud Spending

Your first step is to gather sufficient data about how you spend money now to perform various IT-related functions and exactly what you are getting. Traditional data storage and processes require purchasing a new server when space is running low in your existing structure. You will pay for storage space before you actually need and use it. With cloud-based computing solutions, you only pay for the cloud storage that you use.

Your current data storage costs likely include paying for:

• Physical space
• Utilities
• Technicians and their related payroll expenses
• Benefits packages
• Insurance

You can use historical data to calculate these costs to use in your cloud migration ROI evaluation assessment.

Evaluate your current systems, data storage, and applications:

• How much data storage do you pay for vs. how much you actually use?
• What is the cost of purchasing servers and maintaining your data center?
• Are you paying for only the software license seats you use, and do different departments have duplicate licenses for the same software?
• Does your infrastructure support your usage volume without unwanted lags?
• What do you currently spend on IT labor and maintenance?

Now, calculate your projected costs for the same line items using cloud solutions. There are some one-time expenditures to facilitate the migration process, such as paying your cloud migration service provider, training your employees and IT teams, and testing and validating your transfer.

After migration, you will have some ongoing costs, but they will likely be much lower than your current levels. It is important to note that your cloud migration ROI value may take time to realize, so it is a good idea to involve stakeholders at the early stages of your assessment and planning.

Cloud Subscriptions

You will pay your cloud provider for the services you use. Explore different pricing models, such as per-user or fixed costs, to determine which works best for your needs. These costs essentially replace many of your data center expenses.

Software Licensing

Software licensing is an expense that will carry over. However, cloud-based options often offer savings because of reduced redundancies.

IT Department

Your company will still need IT staff to oversee your operations. However, they won’t have to maintain on-premise servers, so you should see labor-related cost savings.

2. The Value of Cloud-Powered Benefits

Cloud solutions provide many measurable benefits, and you should include their values in your cloud migration ROI calculations. Some of these benefits vary depending on your industry and type of organization, but cloud migration offers:

• The ability to personalize marketing and customer experience, often resulting in increased conversion rates and higher average order values
• Automated processes that reduce labor costs and errors
• Faster and more flexible computing solutions that decrease downtime, increase accessibility and productivity, provide improved security, ensure compliance, and give you a stronger competitive edge
• More stable systems that allow faster feature and application development and implementations
• Minimized environmental impact

Adopting cloud-powered analytics, applications, and marketing tools can give your organization real-time advantages. In addition, cloud solutions better support hybrid and remote workers while still ensuring security.

Organizations can see significant returns on investment in their operational savings, added values, and a decrease in revenue losses. Further, working with an experienced migration provider can reduce or eliminate project risk.

3. Potential Architecture Upgrades

Cloud-powered solutions may include technologies that your current architecture isn’t capable of handling. You may need to invest in new equipment to take advantage of advanced data structure options, improved software applications, and other features.

Although an upgraded architecture requires an initial investment, the benefits it provides typically outweigh the costs.

4. The Right Cloud Migration ROI Calculation Formula

Accurately projecting your ROI is somewhat challenging because it is sometimes difficult to quantify some of the benefits you gain. This formula considers your total cloud value, which includes both cost savings and the value of your other gains:

 ((Total cloud value – investment value) / cloud migration investment cost) x 100% = ROI

As you can see, the initial ROI is negative. However, your investment typically takes about two to five years to pay for itself. Although your migration incurs one-time expenses, you should see significant cumulative savings over time.

Many public cloud service providers provide ROI calculators. When you partner with Cloudficient, we can help you assess your current environment and project your ROI. We also provide a free, no-risk proof of concept to prove that our technology can handle your migration successfully.

Keys to Cloud Migration Success

Did you know that as many as 1/3 of cloud migrations fail and that only 25% of companies complete their migrations in their expected time frames? A successful cloud migration is a major endeavor that requires extensive research and analysis, planning, testing, and validation.

Emerging situations often require adjusted procedures and expectations. You need a flexible yet detailed approach for your cloud migration process, and the people who facilitate your migration need to have specialized knowledge.

Regardless of your project scope, give priority to security, risk management, and governance.

Unexpected expenses can arise if you approach this project haphazardly, and these costs will affect your cloud migration ROI. There are a few ways you can mitigate these hazards.

Map Your Cloud Migration

For a successful outcome, you cannot plan as you go. Cloudficient can help you with planning and implementing your cloud migration. Vital steps include:

1. Define your goals
2. Plan your migration process, including whether you will partner with an experienced migration service provider
3. Evaluate your current IT situation and what your new solution will look like, including any necessary infrastructure or architecture upgrades
4. Develop and implement a governance plan
5. Educate your IT team and other key personnel before you initiate the migration process
6. Back up all data and systems completely prior to migration, cleaning and eliminating unnecessary data
7. Map data origination and destination locations
8. Test your connection, transfer speed, and other vital elements before, during, and after your migration begins
9. Validate transferred data to ensure accuracy, completeness, and accessibility

Skipping any of these steps or not being thorough can contribute to failed or faulty migrations, potentially adding significantly to your expenses.

Off-the-shelf migration methods are unlikely to work. For maximum effectiveness, you must tailor your plan to accommodate your needs and infrastructure.

Choose the Right Partner

Even the most skilled members of your IT department may not have the expertise and tools needed to implement your migration. Selecting the right service provider can increase your cloud migration ROI because we:

• Have a proven process that can accommodate any potential issues
• Use the best platform and transfer methods to ensure accuracy and security
• Don’t have to learn as we go
• Know how to identify, monitor, and overcome problems if and when they arise
• Support your needs throughout the process

The effectiveness of your migration services provider directly affects your costs. And don’t be fooled by offers of “free” migration services.

Optimize Your Cloud Resource Management

Managing cloud spending differs from traditional IT cost management. Your team needs to understand exactly how your cloud solutions work to avoid potential issues with load distribution, redundant data storage, and duplicate licenses.

Select Your Cloud Options Carefully

You need to choose which type of cloud service provider is right for your organization:

• Public
• Private
• Multicloud
• Hybrid

And you need to decide which services to use:

• Platforms-as-a-service
• Infrastructure-as-a-service
• Software-as-a-service

Compare the terms, pricing, and benefits of each to determine what choices make the most sense for your organization and your cloud migration ROI.

Cloudficient’s Procedures

Cloudficient puts a lot of time and effort into the migration process to make your cloud migration as seamless and easy as possible:

1. Analyze and review your project and needs, then tailor an automated solution
2. Deploy and test
3. Pilot and optimize
4. Ramp up and execute
5. Final review

Our purely cloud-based cloud migration platform uses Kubernetes containers to ensure scalable, secure, stable, and transparent transfers.

How Cloudficient Can Help You Maximize Your Cloud Migration ROI

At Cloudficient, we focus on providing thorough, competent services to meet your needs. Our team has extensive experience, so we can handle all your requirements. Cloudficient is a Microsoft Gold partner, meaning we are in the top 1% of global Microsoft partners. We offer flexible payment options and affordable pricing.

With unmatched next generation migration technology, Cloudficient is revolutionizing the way businesses retire legacy systems and transform their organization into the cloud. Our business constantly remains focused on client needs and creating product offerings that match them. We provide affordable services that are scalable, fast and seamless.

If you would like to learn more about how to bring Cloudficiency to your migration project, visit our website, or contact us.