Why Every Business Needs a Cloud Center of Excellence (CCoE)
In this article
Ask any cloud expert and they are likely to tell you that every business with a cloud presence needs a cloud center of excellence (CCoE). Neither the size of the organization, the magnitude of their cloud footprint, nor their preferred cloud operating model (i.e., public, private, hybrid or multicloud) should much alter this sentiment. And for good reason.
When you pause to consider that most organizations are already in the cloud, and that cloud success correlates to overall business success in a digital world, understanding the role CCoEs play in driving cloud success becomes that much more important.
This article explores the what, why and how of modern cloud centers of excellence. It also includes an introduction to WWT's CCoE Accelerator program, an offering designed to help organizations quickly establish their own cloud governance program.
A cloud center of excellence is an internal body that establishes cloud strategy, governance principles and best practices across the organization to manage adoption and ensure business outcomes are achievable in a reliable, cost effective, timely and secure manner. In the public sector, you may hear this type of governance body referred to as the Cloud Program Management Office (CPMO).
Successful cloud adoption ultimately depends on an organization's ability to articulate a clear plan for achieving cloud maturity. It also requires consistent leadership and support throughout the journey. A CCoE is a vital component of establishing your cloud strategy and cloud foundation, two prerequisites for effectively scaling your cloud capabilities over time.
The CCoE not only defines an organization's future mode of operation in the cloud, but it can help identify current and future talent gaps that must be addressed before an organization can operate in the sort of cloud-centric fashion that signals an advanced level of cloud maturity.
Once established, the cloud center of excellence plays a critical role in bridging the gap between the technical aspects of cloud initiatives and the realization of business outcomes that move the business forward.
Cloud centers of excellence generally consist of two functional subgroups, distinguished by their respective focuses on business and technology:
- Cloud business office (CBO): Primarily concerned with establishing policies and standards for cloud adoption and alignment across an organization's business units and users. The CBO typically owns business decisions related to topics like enterprise architecture, governance, training, finance, human resources and staffing, change management, risk management, vendor management, internal marketing, and communications.
- Cloud engineering team: Develops and manages the more technical capabilities related to cloud engineering, infrastructure (i.e., data center, networking, virtualization), reference architectures, applications and workloads, operations, and cloud security. Acting as an organizational center of subject matter expertise, the cloud engineering team helps optimize the speed at which business units can access and scale cloud resources.
Ultimately, the cloud center of excellence exists to ensure alignment between cloud goals and business goals across the enterprise. This ongoing and iterative relationship is designed to streamline strategic and tactical execution across your people, processes and technology in a well-governed, inclusive and harmonious way.
While every organization with a cloud presence can benefit from a cloud center of excellence, larger organizations with more complex IT environments and transformation goals are generally in the best position to profit straight away.
The functional subgroups of your cloud center of excellence (the CBO and the cloud engineering team) should be comfortable addressing the entire cloud lifecycle, from cloud strategy and architectural design through migration, modernization, staffing and support, and ongoing optimization.
As such, the general responsibilities and goals of a high-functioning cloud center of excellence include:
- Stakeholder alignment (CBO): Engaging all relevant stakeholders to streamline cloud decision-making and ownership.
- Business alignment (CBO): Aligning all cloud activities with business outcomes.
- Governance model (CBO): Establishing an organizational structure and governance framework flexible enough to evolve with the needs of the organization and scalable enough to accommodate future growth.
- Best practices (CBO): Establishing common cloud policies, standards and templates for the organization in a transparent manner, including maintaining a body of cloud knowledge; developing accreditation and training programs that drive cloud services adoption.
- Strategy and design (CBO): Developing cloud strategy and architecture, including assessing the cloud platform "as a whole" to determine how it should be setup, configured and consumed.
- Migration (engineering): Executing initial migration activities, including moving the initial waves of applications and workloads to your cloud environment.
- Usage visualization (engineering): Effectively forecasting cloud needs to properly manage resourcing and staffing levels.
- Operational efficiency (engineering): Making sure cloud processes and tools are optimized to enable desired business outcomes.
- Cost management (engineering): Aligning budget with cloud usage forecasts to prevent overspending. Plus, managing, controlling and providing financial stewardship of the assets and resources used in the provisioning and consumption of cloud services. Learn more about cloud cost management here.
- Talent and skills (CBO): Developing and tracking cloud expertise across the organization, and coaching desired behaviors while enabling teams to achieve individual goals.
- Services (engineering): Developing foundational cloud services, including basic components like account structure, VPC strategy, SSO, disaster recovery and DNS.
- Champion (CBO): Evangelizing the benefits of cloud for the organization in a realistic manner, including establishing open and timely communication with the corporate cloud community to encourage full participation, alignment and a sense of ownership in outcomes.
It's important to note that a successful cloud center of excellence must ultimately secure the authority to (a) effect significant change across the organization; (b) span multiple IT disciplines; (c) reach into non-IT technical departments, such as Product Development and Marketing; and (d) draw a direct line to cloud's impact on business outcomes. Without the ability to rise above organizational silos with ease, your cloud center of excellence will not have the desired impact.
One of the core challenges facing organizations today involves figuring out how to transform traditionally on-premises business models into cloud-native ones. Establishing a CCoE is a powerful tool for removing complexity from this transformation process.
In the rush to take advantage of cloud's many benefits, organizations often fail to consider important factors such as governance standards, infrastructure modernization dependencies, and whether their workforce has the skills required to scale cloud with the business. After all, cloud is more than a technology. It's an enablement tool for transformation that requires a comprehensive strategy and, often, changes to how people, processes and technology function in harmony across the business.
That's why it's not uncommon for organizations to realize they need a CCoE only after they run into a problem. Perhaps a key cloud initiative stalled or caused an unexpected business disruption. Or a newly formed cloud team is finding it difficult to collaborate with legacy IT and business teams. Or there was a failure to secure the executive buy-in needed to adopt cloud at the speed demanded by business units. Each of these represents an issue your CCoE can head off.
Importantly, CCoEs can help IT organizations address the parallel infrastructure and orphan processes that get lost in every cloud migration. Figuring out how to deal with the leftover technology, processes and workloads not migrating to the cloud (or not migrating yet) can be a huge headache for IT. Your cloud center of excellence can bring a sense of order to this madness.
To better visualize the importance of a CCoE, let's compare before and after states:
Moving to the cloud is a long-term investment in time, planning, effort and adoption. It is also a collaborative opportunity for IT to drive exciting outcomes across the business.
Along the way, organizations must be prepared to meet new technical and business challenges presented by regulatory requirements, legacy applications, latency and data sovereignty. Your CCoE can make streamline this journey, helping you establish a strategic foundation on which to scale your business and achieve your goals.
CCoEs should be designed in a flexible manner that closely aligns with business and IT objectives. At WWT, we help clients avoid bias toward any particular design when structuring their CCoEs. Our North Star involves identifying the capabilities required to meet each client's unique objectives, then developing the appropriate organizational schema needed to achieve them.
Keeping flexibility in mind, your cloud center of excellence should include cross-functional stakeholders from across the business, tapping leaders from teams such as application development, network engineering, database administration, system administration, finance, procurement, cybersecurity, legal and business operations.
While certain CCoE roles should remain static for continuity purposes (most likely those on the CBO side of the house), others can be rotational depending on the subject matter expertise demands of each migration wave (most likely cloud engineering roles).
So, how does an organization begin forming a CCoE to streamline and manage organization-wide cloud transformation?
Given the complexities of launching a new internal governance unit, we recommend taking a phased approach that focuses on cross-functional collaboration and tight feedback loops. This is the approach we've successfully used with the enterprise clients who have participated in our CCoE Accelerator program, detailed below.
We've developed and validated a program to accelerate the implementation of cloud centers of excellence at the enterprise level. Our CCoE Accelerator program is split into three phases, the length of which is determined by each client's level of cloud maturity and business goals:
The initial stage focuses on discovery and education, organization and charter creation. Activities include:
- Educating stakeholders on CCoE principles.
- Developing a baseline understanding of your current state of cloud maturity.
- Establishing a CCoE core team structure, plus identifying an executive sponsor and the core team members of the CBO and cloud engineering teams.
- Creating a CCoE charter that includes your vision, mission, objectives, scope of operations, and key policies and processes.
- Determining a staffing plan and RACI chart.
- Defining metrics to measure CCoE progress and success.
This stage focuses on building the CCoE and cloud knowledge transfer. Activities include:
- Establishing CCoE meeting schedules and agendas.
- Establishing a CCoE knowledge repository.
- Developing CCoE policy, procedures and standards.
- Creating an actionable high-level CCoE roadmap.
- Documenting, guiding and advising on work that enables your CCoE to assume ownership and responsibility.
The final stage of our CCoE Accelerator program focuses developing and reviewing agreed upon engagement deliverables and presenting them via executive briefing. As always, our goal is consistent client collaboration that provides execution transparency closely aligned to the achievement of business goals and engagement objectives.
Our CCOE Accelerator offering is perfect for clients looking to properly manage cloud adoption and usage. For more info on our CCoE formation capabilities, reach out to your account team or a WWT cloud expert.