Information Technology Reference
In-Depth Information
issues related to this shift of business model, as well as means to calculate the impact
and implications of changing business models in a company that is already
sustainable.
Although a cost-benefit analysis has to be customized for each migration project,
there are several common concepts that need to be analysed:
•
Costs, divided in development costs and operational costs. Whilst the first kind
focuses on how much it will cost to migrate an application compared to
developing it from scratch, the second kind focuses on the costs related to
training to employees with the new roles they are expected to have, the costs of
the cloud provider, costs of regular updates and continuous maintenance, new
marketing activities, as well as other structural costs.
•
Revenues, considering not only the revenues from the business itself, that is,
number of customers using the service, but also considering other issues that at
first sight are not seen as direct revenues but that will eventually lead to that,
such as:
•
(Reduced) Costs of no quality: More quality in the application as a service
since upgrades are done more frequently and every time this happens,
regression tests are performed. This is measured in terms of less rework
(and human resources dedicated to it) and less time dedicated to solve
customer complaints.
•
(Reduced) Costs in travelling for maintenance and installation.
•
(Reduced) Costs in marketing.
(Greater) margin by targeting new markets non reachable beforehand.
This analysis provides the management level with at least the following data:
•
•
Net Present Value for the next five years.
•
Return on Investment for the next five years.
•
Payback in years.
However, not only economic factors are studied in this business analysis. The
business processes within the company are also analyzed in order to determine the
impact of the business model transition at process level. Cloud Computing Business
Model implies the redefinition of old processes and the creation of new ones, such as
how to control and maintain the SLA's, customer care, and other support processes
but also those related to the business core, the software development, design and
testing.
D. Modernization Strategy
Once the metrics and indicators have been analyzed, the organization will decide on
the convenience to continue with the modernization process or not.
If the organization decides to continue with the modernization process, a strategy
indicating the activities to carry out will be defined. This strategy will provide the
organization with the needed roadmap in order to achieve the desired maturity
expressed in the questionnaires.
