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4 min read

The Cost of Not Moving to Cloud

By Charlotte D’Alfonso on Jun 28, 2022 10:00:00 AM

If you're feeling confused about migrating to Atlassian Cloud, you're not alone. One of the biggest unknowns when deciding whether to make the move to cloud is right for your business is what the investment looks like, or better yet, how much will not moving to cloud cost your organization in the long-term.

The standard question to start with when investing is, "What is the ROI?" When determining the cost of moving to the cloud, the benefits are easy to calculate. Cost savings, increased efficiency, improved security,  better environmental footprint, employee safety can all be calculated by the ROI.

Henry Mintzberg once said “Strategic planning is not strategic thinking. Indeed, strategic planning often spoils strategic thinking, causing managers to confuse real vision with the manipulation of numbers.” By all means, determine your ROI. However, keep in mind that calculating the ROI doesn't answer the question, "What is the cost of not investing?"

In this article, we'll take a look at how to calculate your ROI, determine TCO, and examine the costs of not moving to cloud that organizations often overlook. 

Calculate Your ROI

The standard formula for ROI (Return on Investment) is:

(profit from investment - investment)/investment = ROI

 

When moving from a data center to cloud, the cost would be calculated as:

(Savings from moving to the cloud - cloud migration costs)/cloud migration costs

 

Savings from moving to cloud are calculated by determining your Total Cost of Ownership (TCO).

Determine Your TCO

TCO is calculated by identifying all the costs associated with your current server infrastructure. Keep in mind that operational and fixed costs both need to be calculated. Some of these costs include: 

  • Servers - The average lifespan of a server is 3-4 years.  
  • Physical location - A location to house the servers
  • Maintenance and support  for the servers - This includes supporting hardware, cooling systems, and all the parts needed to purchase, maintain and replace the servers
  • Staff -
    • Asset Management - IT staff time monitoring system
    • Maintenance - Maintenance staff fixing and maintaining system
  • Software licensing - Systems used to run your server infrastructure
  • Energy bills - Impact that running servers has on energy bills
  • Downtime for upgrades

Here is a great example of how one of our clients–Castlight Health–drastically reduced their TCO when moving to cloud

Consider Cloud Migration Costs

  • Cloud services - Subscription fees from your cloud computing provider
  • Internal resources - IT team (and any other staff members) working on the migration
  • Software licensing - Any new software licenses acquired as well as forfeiture of licenses you already purchased but won’t be necessary anymore in cloud
  • External resources - A team with cloud migration expertise to help make the transition as smooth as possible

Examine Not-investing Costs

  • How far behind your competitors will you be? Apps are being developed and strategic partners are investing in cloud-first solutions.
  • How much is downtime costing you? Consumers want 24/7 immediate results.  
    1. Lost sales revenue
    2. Lost employee productivity
    3. Damaged reputation with customers and key stakeholders
    4. Data loss 
    5. Potential compliance/regulatory penalties
  • How will the supply chain affect my data center operations? Are you relying on others to have the products needed in stock? The recent semiconductor shortage due to Covid is a prime example. 
  • What opportunity costs am I missing?  According to Investopedia, Opportunity Cost is listed as the “potential benefits one misses out on when choosing one alternative over another”.  Could your IT costs be transformed from a cost center to a consumption based revenue source?
  • What is the cost of scalability?

The Price You'll Pay 

CEO's must look at a changed and continuously evolved business landscape. Seizing near term revenue opportunities without the upfront CapEx or long-term support costs or quickly winding down without worry about unused infrastructure helps you navigate today's digital economy. The price you'll pay is more than just ROI. It is the potential cost of opportunity lost, stagnation, and falling behind in the rapidly changing world. Strategic thinking means looking at ROI and opportunity and considering your long term vision. 

With Atlassian's Server quickly approaching end of life, cloud migrations–especially their costs– are top of mind in the Atlassian community. If you are overwhelmed or confused about how much an Atlassian Cloud migration will cost you, your best bet is to bring in an Atlassian Cloud Specialized Partner to help guide you through every step of the process. Praecipio Consulting proudly holds a 100% migration success rate thanks to our highly customized approach that involves a diligent planning process and rigorous testing. Reach out to our team of cloud migration experts, and we'll help you determine costs, next steps, and what it will take to migrate your organization to Atlassian Cloud.

Topics: roi cost-effective atlassian-cloud cloud migration
4 min read

How Service Management Capabilities Improve Employee Onboarding

By Joseph Lane on Mar 26, 2021 9:13:38 AM

Blogpost-display-image_How Service Management Capabilities Improve Your Organization’s Employee OnboardingHave you ever started work at a new organization as an eager new employee, only to find that you don’t have everything needed to “hit the ground running”? It might be that your laptop isn’t ready. Or you have a laptop but you’re missing a critical piece of software (or access to a critical online service). Of course, it’s not only the IT department that can fail to provide a new employee with what they need to be productive from day one. Human resources (HR) might have missed a new employee from the mandatory onboarding training course. Or the facilities team might have failed to arrange building access or to provide them with a suitably equipped place to work.

Alternatively, the issue might not be that these things are repeatedly missing on new employee arrival. Instead, it might be the necessary lead time has an unwanted business impact – that employees can’t start in their new role for two months while the manually-intensive employee onboarding process slowly grinds out what’s needed for them. Or it might be that recruiting managers need to waste their precious time “keeping on top of” all the various departments responsible for ensuring that their new employee can work productively from day one.

To help, this blog explains how Service Management can be used to improve employee onboarding operations and outcomes.

Why employee onboarding is a common issue

None of the above scenarios are ideal – for the new employee, the recruiting manager, and business operations – yet they still happen too frequently when the onboarding process and its many “splinter” sub-processes are manually intensive. It might be that the sheer complexity of all the moving parts, with multiple business functions needing to do “their bit,” causes the issue in terms of the logistics. Or it might be that the immediate lack of urgency for the individual tasks means that they’re a low priority in each business function’s work pipeline, such that some tasks unfortunately “slip through the cracks” when people are bombarded with a continuous flow of higher priorities. Or it might be that the high level of manual effort is the cause of organizational and provisioning mistakes being made.

As to how common onboarding issues are, a commonly-quoted employee onboarding statistic on the Internet – which is sadly from 2017 but still worth pointing to with an age caveat – is that:

Only “12% of employees strongly agree their organization does a great job of onboarding new employees.”

Source: Gallup, State of the American Workplace Report (2017)

Thankfully, Service Management – the use of IT service management (ITSM) principles, best practice capabilities, and technology to improve business function operations, services, experiences, and outcomes – offers a digital-workflow-based onboarding solution that’s commonly one of the first adopted use cases of Service Management within an organization.

Plus, the global pandemic has made employee onboarding more difficult

While onboarding has traditionally been problematic for organizations, the operational impact of the global pandemic has made the potential issues worse. First, because new employees might be remote workers, meaning that any failure to fully enable them on day one is now harder for them to work around. For example, using a spare office “capability” isn’t viable when you aren’t in an office. Second, some of the various business function employees charged with setting up new employees might be home working, which makes it harder for the manually intensive process flows to work across what are now both functional and locational divides.

How Service Management helps with employee onboarding

The ITSM principles, best practice capabilities, and technology employed within Service Management offer a platform for business-wide digital workflows and optimized operations and outcomes. The technology, in particular, helps in terms of making employee onboarding all three of “better, faster, cheaper” through:

  • Workflow automation and service orchestration
  • Service level monitoring, alerting, and notifications
  • New technology-enabled capabilities, such as AI-enabled intelligent automation
  • Self-service portals and other digital channels
  • Knowledge management enablement
  • Dashboards and reporting capabilities

More importantly, Service Management not only helps internal business function operations but also the intra-business-function operations that are a big part of employee onboarding – with the need processed by both HR and the invocation of services from other business functions.

Examples of Service Management at work in employee onboarding

The digital workflows required to get an employee road-ready and productive from their first day of work can be taken back to the initial need for a new employee to fill an existing or new role. The initial workflows can therefore cover all of the following:

  • The line manager notification of the need to recruit (to HR)
  • The approval of the recruitment
  • Job description creation and/or validation
  • The advertising of the role
  • The screening of candidates
  • The interviewing of candidates
  • The selection and notification of the successful candidate

You might argue that this is recruitment rather than onboarding but, in a truly digital environment, this can be an end-to-end workflow such that the successful candidate’s acceptance of the offer, perhaps after personal negotiations, triggers the next set of onboarding steps. These can include:

  • The HR team sourcing and populating the required information in the new employee's HR record
  • The legal team making the appropriate background checks, processing contract paperwork, and ensuring that other legal necessities are met
  • The HR team arranging employee benefits, which could include a company vehicle lease agreement via either the corporate procurement or fleet teams
  • The HR team arranging and maybe delivering the required onboarding training – that covers employee polices, IT usage, finance-related “how-tos,” etc. – plus any other immediate learning needs (physical and/or virtual)
  • The IT team ensuring that the required devices, software, and access permissions for the role are all provisioned in time for the employee’s start date
  • The facilities team sourcing and provisioning the required working environment for office-based working, home working, or both
  • The security or facilities team providing appropriate physical access permissions and means
  • The facilities team providing corporate car parking facilities if warranted

This list isn’t exhaustive, but it’s indicative of how starting the employee onboarding workflow(s) – perhaps via a self-service portal – can trigger the prioritized execution of a wide range of required processes and tasks across multiple business functions using automation and logic. Where the enabling technology not only monitors and manages task progression, but it also integrates with other systems (for record updating, ordering, and provisioning), seeks task-related approvals when needed, provides reminder notifications, and flags up delays and other onboarding issues for appropriate human intervention.

Why wouldn’t your organization want to automate the end-to-end employee onboarding process with digital workflows to save time and costs and to deliver a better employee experience? If you would like to find out more on how Service Management can improve your employee onboarding capabilities, reach out to the Praecipio Consulting team

Topics: blog service-management cost-effective human-resource itsm digital-transformation
3 min read

ESM Part 2: Three Key Benefits of ESM

By Praecipio Consulting on Aug 4, 2020 3:47:00 PM

ESM Part 2 Header

If one system can do with relative ease what it used to take multiple systems to do, it makes sense to use that one system, right? Following up on our first blog post of this series, we continue to explore the benefits that ESM brings to an organization. 

Historically, the toughest part of this statement had been that one system could not do what multiple systems could, resulting in a need to keep those multiple systems in place. However, the software has advanced to the point where this is not the case anymore. As an example, Jira Software was originally developed for software development teams to track bugs and was not feasible for an HR or Legal team to use. Today, its flexible workflows, security controls, ease of visibility, and several other characteristics have allowed all teams within the organization to use Jira. This has given way to the rise of Enterprise Service Management (ESM) as teams realize that they can simplify their software landscape and reduce the number of systems in play.

Consider three specific benefits of replacing multiple systems with one:

  1. Eliminate clunky handoffs. The toughest part of the process is to understand and improve the handoff from one system to another. In addition to evolving teams, the work itself tends to change physical form, from an Excel spreadsheet to a Jira issue to a Salesforce ticket and so on. This creates unnecessary steps in the process and requires extra time to convert and understand the work. This behavior is not the result of intelligent design, but rather a factor of history and the way things evolved. Condensing to one system helps eliminate these physical shifts, resulting in cleaner handoffs and reduced process time.
  2. Include a rich history. When an item moves from one system to another, its history can get lost. A classic example is when a developer has a work item without the original business requirements or design thoughts from upstream teams. Cutting down to one system provides the team with the ability to receive the entire history of the work item. This rich history provides valuable context, eliminates confusion, reduces process time by decreasing the time spent understanding the problem, and decreases the possibility of rework due to misunderstood context. 
  3. Reduce Costs. One license paid to one vendor generates economies of scale and minimizes costs related to using multiple licenses. It typically increases bargaining power with the vendor and decreases cost per seat. Additionally, maintenance and training cost both decrease. If an employee works in one system, compared to several, that translates to only one training session versus multiple sessions. Better yet, keeping the training budget the same and committing to several training sessions on one system will further increase people’s proficiency in that system, boosting their productivity and performance. Maintenance then becomes easier as the IT team only has one system to monitor and keep running. Similar to training, when you invest time into only one system, it encourages deeper learning within the team and drives results in better support of the system, further minimizing costs due to less downtime and incident recovery time.  

Not to mention, using one system as opposed to several brings additional benefits of improved communication and data insights. Understanding the workflow and developing patterns is much easier in one system than it is when work transfers through several systems. Furthermore, when teammates only have one system to check instead of several, they are more likely to communicate faster and better understand problems. 

Finally, a benefit not to overlook is the fact that employees like working within a single system. In our experience, employees enjoy seeing workflow through to different teams and appreciate the ease of using a single, connected, and integrated system. Furthermore, with one system to monitor, teammates have improved visibility of work coming up the pipeline and can follow the progression of the work they’ve completed. This leads to a better understanding of upcoming work, as well as a greater sense of accomplishment when they can see their work completed. 

In the next of this series on the topic, we will explore the ROI of ESM based on our experience with a client, demonstrating how implementing ESM best practices can save you money while improving your processes.  

Topics: enterprise process-improvement service-management cost-effective

Praecipio Consulting is an Atlassian Platinum Partner

This means that we have the most experience working with Atlassian tools and have insight into new products, features, and beta testing. Through our profound knowledge of Atlassian environments and their intricacies, we can guide your organization as you navigate these important changes.

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