Gartner analysts forecast that by 2026, three of four organizations will base their digital transformation strategy on the cloud as the fundamental platform. As organizations use more public cloud services, total end-user spending is predicted to increase by over 20% in 2024.

Yet, approximately 32% of a company's cloud budget is squandered, with 54% attributing the primary cause of this waste to insufficient visibility into usage and efficiency. Mostly, it means allocating money to unused applications and storage. This phenomenon, known as cloud waste or shelfware, presents challenges for customers, investors, partners and the environment due to sunk costs and resource consumption.

Based on my experience, however, I know that cloud waste can be controlled, and organizations can benefit from cloud migration. Here's what we've done at Belitsoft that I believe can work for your company too.

Implement Micro-Change Management In Your Cloud Migration Journey

Guided by the micro-change philosophy, our recommended approach involves breaking down substantial changes into smaller, incremental ones. By adopting this approach, organizations can help ensure that the modernization process doesn't turn into a single, burdensome large-scale transformation project. Advancements can be accomplished with a more modest budget because dividing migration projects into smaller segments demands fewer resources.

Transforming a long-term ambitious project into mini steps with clearly defined goals and outcomes will help show all stakeholders the tangible results from each milestone. It can also help prevent procrastination because small, quick wins stimulate progress and boost morale.

However, don't confuse this strategy with a quick-fixes approach, which isn't enough for fundamental digital transformation that can open new horizons for businesses. Quick fixes can address a problem temporarily, but often, they just hide increasing technical debt.

In contrast to this approach, manageable micro-changes will help you more precisely control potential risks and roadblockers. But this is impossible without a preparation stage.

For example, a client of ours needed an urgent solution for their legacy IT infrastructure because it was created without accounting for the organization’s scalability plans for other markets. As a result, the core application worked slowly, causing significant downtime.

We had a couple of ways we could approach this:

• We could simply add extra physical servers.
• We could shift from the current on-premise infrastructure to the cloud.

In the case of shifting from the on-premise infrastructure to the cloud, we also could suggest two options. The first one was a fixed-price contract without any upgrading of the legacy applications (which, at first glance, satisfied the client's request to promptly solve the problem without unexpected investments). As a second option, we could opt for a multistep cloud migration process with an accurate discovery phase, proof of concept (POC) and time and material pricing model in which the customer pays for each completed deliverable.

The client ultimately chose a multistep process that took more time for the client but helped both of us avoid project delays and budget overruns. In this process, you first project potential risks and vulnerabilities and take mitigating measures in each project stage. Second, you estimate the total cloud migration project cost and prepare two separate budget offers: one without the preparatory core application upgrading and one with the preparatory modernizing of the core app.

I advise every company considering transferring to the cloud to ask their vendor for such calculations. This is because a quick lift-and-shift approach to the cloud might provoke overprovisioning, which means paying for unnecessary cloud resources, or even underprovisioning, which is when you lack sufficient resources to manage the workload. Both scenarios often harm business processes and cause unexpected expenses. But more damaging for a company is that without preparatory upgrading, the core application might become isolated from other vital apps, halting your business.

With micro-change management, a cloud migration project becomes a part of a large legacy application modernization strategy. At the technology stack level, each iteration introduces modernized code, progressively diminishing the proportion of legacy code until the entire system is upgraded. Throughout this process, the system continues to operate seamlessly.

You can prioritize modernizing critical user journeys by focusing on vital and frequently used workflows. For instance, in a project management app, this might include creating a new project, assigning team members and allocating resources.

Simultaneously, after testing all dependencies, you can move nondifferentiating functions from core applications to third-party SaaS or PaaS solutions. Keeping non-core functions in-house can be costly. A business can delegate nonessential tasks to third-party services, saving resources for its key competencies, whether that's product development, customer service or marketing activities.

Think Long-Term

As in the case of life-long learning in our ever-evolving modern world, you need to accept that your modernization strategy will likely demand new optimizations during the organization's life cycle. I recommend establishing a clear business procedure for incorporating innovations based on my own success with this approach.

I also suggest kick-starting the process by dedicating a special R&D team to search for various digital trends, including new cloud tools, and test them. Then, assess the results and use the most advantageous solutions. This method has worked well for our own internal processes and has enabled us to stay ahead of our customers' needs.

Conclusion

Inexperienced IT managers often hastily migrate to the cloud, moving their entire on-premises infrastructure in one go. Instead, you need to find a balance between quick fixes and long-term transformation benefits. Micro-change management can become your magic pill and give you the superpower you need to overcome this challenge.