The benefits of moving on-premise applications to the cloud are well documented - from agility, productivity, ease of use, elasticity and flexibility to quality, scalability, security, and reliability. What’s unknown is, first, how much that cloud migration will cost and secondly, how to quantify the value of all the cloud benefits. Determining the answer isn’t easy, especially not for complex large scale enterprises like communications service provider. You can make use of ROI calculators published by the hyperscalers as an excellent basis, but these tend to be generic rather than vertical specific and cannot cover factors that are individual to each organization.

So how do you go about building your ROI study? Let’s start with understanding the costs. The primary areas of costs can be divided into three: pre-migration costs, post migration costs and the cost of the migration. The main cost categories are on-premise data center costs, hardware, software, operations and maintenance.

At a high level, the ROI study follows a five step process:

• Audit your application inventory of current IT hardware and software assets. Gather all asset specifications, performance data, and the details of running processes and network connections. Understand application interdependencies and supporting infrastructure.
• Calculate the current direct and indirect costs for purchasing, operating and maintaining the application on your present IT infrastructure. Indirect costs will be related to downtime, such as loss of productivity for employees and other users, customer dissatisfaction, and damaged reputation.
• Estimate cloud infrastructure costs. Here you can use the calculators provided by hyperscalers.
• Estimate cloud migration costs. This cost is highly dependent on the skill set of the team performing the migration. Tasks priced here include testing, the cost of system integrators, parallel run of on prem and on cloud systems, cloud provider fees for data transfer and many more.
• Estimate post migration costs - After the cloud migration is completed, there may be costs for continued integration, application testing, team enablement, administration etc.

This process provides a high level indication of your financial commitment, however it is difficult and sometimes impossible to get to all the numbers you would ideally like to track. You have to learn “how deep to dig” and when to make use of industry-wide statistics.

The next stage is to synthesize a holistic picture that takes into account both the cost of the cloud and the benefits of the cloud, which is the basis for executive decisions. Here you must evaluate the value of intangible benefits such as innovation, time-to-market, velocity, resilience, sustainability, ability to compete and reputation, and where these cannot be expressed in numbers, present the valuable to management in a manner that allows a balanced decision.

Amdocs’ business case development services leverage models for calculating and weighing those factors, and help you present the results to management.