Costs under control: strategic financial controlling for a successful cloud migration
Initial situation
Migrating to the cloud offers companies benefits such as scalability, flexibility and cost efficiency. But before a company takes this step, fundamental decisions and preparations must be made to ensure a successful cloud migration. This begins with a careful evaluation of the current infrastructure.
A cost analysis of the existing infrastructure is one of the first and essential steps. It enables a well-founded decision to be made as to whether a cloud migration makes economic sense and which migration path should be chosen. This analysis not only includes a list of cost items, but also an evaluation of the entire IT infrastructure with regard to future investments and potential savings.
First of all, the running costs of the on-premises infrastructure, including hardware, software licences, maintenance and operation, should be analysed. This forms the basis for the comparison with the expected cloud costs. In addition, the increased costs of parallel operation during the migration must be taken into account, as this is usually necessary to ensure operation without interruption.
Planning the decommissioning of the old infrastructure is also crucial. Decommissioning the on-premises systems quickly after the migration avoids additional costs and realises potential savings more quickly. A well-founded decision on the timing and process of decommissioning has a significant impact on the overall costs of the project.
The selection of the appropriate cloud platform and services should be based on the specific needs of the company. The decision between IaaS, PaaS or SaaS requires a thorough comparison of costs and functions in order to optimally manage the financial aspects.
After the preparatory measures, the financial planning and control phase begins. This ensures that the project remains technically and financially on track. Financial and project controlling manages the costs and ensures profitability during the migration.
Calculation of cloud migration costs & budgeting
In addition to data migration, migration costs also include training, implementation and possible downtime. These factors should be calculated precisely at an early stage to ensure that the overall budget is realistic. In addition, detailed budget planning is required that also takes into account ongoing operating costs and savings. A particular focus should be placed on optimising the term of existing licences in order to minimise duplicate costs. Effective stakeholder management is essential in order to clearly communicate the cost curve and present a convincing business case.
Optimisation of costs
Cost optimisation strategies are crucial for efficient migration. These include long-term licence agreements with price discounts. Nearshoring or offshoring options for IT services as well as outsourcing support, e.g. outsourcing customer service and maintenance to external partners, should also be considered in order to realise potential savings and relieve internal resources.
Cost monitoring and continuous financial management
Effective and continuous monitoring with monitoring tools ensures the optimal utilisation of cloud capacities and helps to avoid unnecessary costs and achieve the planned cost savings. Regular reviews and adjustments to the budget are necessary to ensure cost efficiency in the long term. An important aspect of monitoring is monitoring the terms of existing licences and their planned replacement (decommissioning). Therefore, ongoing financial management is required during and after the migration to ensure that the targeted cost savings are achieved.
Conclusion
Structured financial controlling is the key to successful and cost-efficient cloud migration. Dedicated management, supported by the finance PMO, is crucial to efficiently control the entire process and minimise risks. Companies should clearly define the next steps:
- Carry out a cost analysis of the current infrastructure
- Create budgeting and financial strategy
- Implement a monitoring system to control costs
At Be | Shaping the Future, we have the expertise to support organisations in these critical areas and make their cloud migration effective. Contact us to find out more about our services and to discuss customised solutions for you.
