This article includes excerpts from the paper Cloud Computing: The New Strategic Weapon.
As per the Nicoletti, not all projects are on success rate. Nicoletti suggested that 90% of projects do not meet schedule, budget and the desired quality due to many reasons. Only 9% of large, 16% of medium, and 28% of small company projects were completed on time, within budget and delivered measurable business and stakeholder benefits. There are many reasons for such failures.
Let me explain on five main reasons on causes of failure in cloud computing projects:
• Failure to define Success
• Failure to understand the financial realities
• No complete understanding of the requirements up front
• Jumping too quickly into technology
• Unskilled Resources
A broad analysis of the causes shows that the issues are primarily related to Scope, Change, Risk and Cost. A look at each of the causes in detail will reveal the solution to the problem.
Failure to define Success:
Like traditional projects, cloud computing projects also require to be part of an enterprise wide Strategy. Cloud Computing is not a solution to all the problems of an organization. Therefore it is important to set a list of realistic expectations to be achieved as part of the Cloud Computing Shift. For most organizations, the list is not known upfront. Cloud Implementations are generally adopted with short term focus and in the long term these project fail to meet the high expectations of the business users. The solution to this concern is to establish a strategy and define a roadmap. If there is no strategies established then start with a pilot and use the experience to define the strategy and create a roadmap for the Cloud implementations.
Failure to understand the financial realities:
One of the primary reasons for an organization adopts cloud is the cost advantage. But the financial aspect depends on the type of service consumed, who pays, how the payment is made. It is critical for the project team to do a financial analysis on the TCO (Total cost of ownership) to identify the actual cost vs. the perceived cost benefit. Most of the projects today are never completed within Budget. This becomes even more true to Cloud Projects as features is available as Service, and the stakeholders and project team can be prompted to utilize a service due to its lower initial acquisition cost. It is therefore very important to continuously monitor scope creep and have effective change control measures.
No complete understanding of the requirements:
When projects are initiated without a complete understanding of the requirements, the chances of failure are high. In a hurry to adopt cloud, and to reduce cost the project team tends to move quickly to implementation without a roadmap to guide the implementations. As discussed earlier, it is important to have a roadmap. But at the same time it is important for the project team to realize that the organizational dynamics change over a period of time. With Cloud, it will not be beneficial to attempt long term projects. Instead, the Project management strategy should be agile in nature. This methodology provides the project team many opportunities to assess the project and respond to change requests faster. Also, agile methodology provides the project team to incrementally deliver value. The methodology allows for well-defined set of changes and added features to be addressed in sequential phases.
This helps reduce development cost and time to market (TTM) and users’ needs are addressed quickly. Scope Creep and Gold Plating are controlled as new requirements or change requests are address in successive iterations and after complete analysis of the requirements. Also the iterative approach enables the project team and other stakeholders to associate a perceived cost to the requirements. The iterative approach also enables the committed features to be delivered timely, thus reducing the cost escalations.
Jumping too quickly into technology:
Deciding the technology before having a finite idea of the requirements can prove to be deadly in cloud projects. Thus it is important to scrutinize the organizational objectives and roadmap, and understand the user requirements before the technology selection is initiated. The technology selection should also be based on the security, availability, architecture and long term performance considerations.
Cloud computing resources are required to possess a different technical capability and skills for integrating the On-Premise applications and the Cloud based applications. As cloud is a relatively new technological paradigm there is scarcity of skilled resources. The risk of project failure becomes drastically high with the lack of required skill set.