How will you build the business case for the digital transformation - or simply your next cloud transition? We believe the answer is:
1.
to assess cost by fully-burdened workload and
2.
address the full lifecycle cost including current and
forecasted production costs as well as the often missed or underestimated
migration costs.
We call
this blind spot "The Gap".
To address this need, The TCO Alliance, a partnership of the International Institute of IT Economics and IT Business Decisions is pleased to announce Workload TCO Analyst.
Key Issue: What is the true cost of IT transitions?
Solution: Perform a rigorous financial analysis of:
· Major
on-premises and managed services workloads
· Develop
workload baseline costs, future scenarios, and decision options
· Using
detailed “puts & takes” to show financial impact, performance tracking and
“what if?" analysis
HOW WORKLOAD TCO
WORKS
Very recently, in an enterprise not so very far away,
a decision was made. The decision was how to best modernize an on-premises
legacy HR application.
Situation:
The 10-year old HR application was highly customized to meet the changing
business needs of the enterprise. It was integrated with several other
applications and data sources. However, it was showing signs of age. It was
increasingly down for maintenance and unplanned downtime; it was pushing the
capacity of the infrastructure; and it was not able to easily meet the new
demands of new social media and other workplace interfaces. This application is
one of many workloads requiring financial analyses to assess the cost of moving
to the cloud.
Task:
Senior management has mandated a cloud-first strategy. This requires all new
applications to be cloud-based (private, public or hybrid) and any new
investments to prefer cloud solutions. The driving forces behind this strategy
are that cloud platforms may cost less and require less capital investment, enable
a service-oriented strategy, and a more agile, responsive IT function.
As this was a >$1M project, senior management
oversight and due diligence dictated that all options be put on the table. The
most viable options were to:
A. Do nothing
B. Upgrade the on-prem application. (Vendor support for
the current version would cease in 18 months)
C. Modify the existing workload, make it “cloud-ready”
and re-platform it, which implied refactoring, microservice APIs and
containerization.
D.
Abandon the
legacy application and move to a commercial SaaS offering
Approach:
There were many decision factors, but a primary driver was economic. Which
approach would cost less over time? This enterprise employed a process called
Workload TCO Analysis (WTA) to compare the above scenarios. WTA is based on the
concept of a Fully Burdened Workload (FBW), where TCO can be assessed for any
discrete workload.
The 8-week project included:
1. Perform an analysis of the current workload TCO by
building a baseline resource / asset model
2. Forecast the baseline forward with a fact-based
forecasting tool
3. Develop a TCO scenario for each option, perform an in
depth financial analysis of each path forward
Result:
The engagement developed a defensible financial analysis that could be reviewed
and understood by senior management. The decision was made to take option D,
sunset the existing application and migrate to the cloud-based version from the
same vendor within the next 12 months. The organization originally compared the
SaaS costs to the on-prem costs. The WTA identified additional key costs such
as multiple APIs, business process and governance changes, and SaaS staff
support costs.
The benefits of enabling new functionality and complying with
the cloud-first strategy were the business justification drivers. Management
had a clear expectation of the migration and long-term operations costs of the
application.
The project produced the additional benefits of a
baseline IT cost model that will be used to:
· Build a
strong financial foundation underneath your IT roadmap
·
Build zero-based annual budget with what if capabilities
·
Make other point decisions as new workloads are assessed
· Build a
fully loaded IT service cost consumption model
About The TCO Alliance
The TCO Alliance is a partnership of independent, IT
financial analysts and modeling experts formed to solve IT’s most critical cost
assessment challenges.
The principals are:
Bill Kirwin - Inventor of TCO at Gartner. Founder, International Institute of
IT Economics (IIIE)
Bob Multhaup - Former CIO, Inventor of ITin3D© cost modeling tool
Peter Brooks - Business Value Consultant. Partner, IIIE
And a team of independent, IIIE certified IT
financial assessment professionals
What We Do
Show fact-based financial future options to for
making major
planning decisions
planning decisions
Deliver in-depth expert consulting and a working cost
model of their optimum path forward
Our Value
Quantification of the optimum financial path forward
with in-depth, proven tools to avoid pitfalls between digital transformations
Rapid, in-depth, affordable decision support tool to
avoid major miscalculations in moving from one ‘S’ curve to the next
Our solution is scalable, flexible for point
decisions or major planning initiatives
More effective than biased vendor-driven analysis and
expensive management consulting
Our Unique Deliverables
We use ITin3D©, a powerful financial modeling and decision
support tool to:
· Defensibly communicate the transition costs to senior
management
· Perform scenario options including financials impacts
to evaluate the ‘best’ path forward
· Flexible planning, track actuals, rework plan – ability
to easily rework the plan to adjust for changes to re-forecast financial
impacts using the ITin3D© model
TCO Alliance Models work for any IT change scenario -
BYOD, Data Center Migrations,
Sourcing, Digital Business Transformation. If you can think it, we can model
it.
Contact:
The TCO Alliance
info@iiievalue.com
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