As an IT leader, you play a critical role in your company’s digital transformation. It’s your job to ensure that everyone within your organization has the resources they need in order to thrive in the digital era. Emphasis is on deploying new and existing business applications to the cloud in order to meet your company’s goals for speed, agility, and innovation.

Existing applications can also be looked at, so that you can seek to enhance your long-time critical workloads with benefits such as automated scaling and ease of integration. But simply deploying some workflows to a cloud platform won’t necessarily result in greater speed or competitive advantages. In fact, the exact opposite may occur. To ensure maximum return on your investments, ask yourself the following questions:
  • Which workflows and applications should be deployed to the cloud, and which should be left on-premise?
  • Which workloads require refactoring, and which can remain in the legacy system?
  • How can you reduce the burden on management while ensuring excellent performance and delivery?
  • Can you ensure that your exacting security and compliance requirements are met in a cloud environment?

These questions reflect the inherent complexity of managing a move to the cloud. This complexity is a key reason why you should opt to work with a cloud managed services provider to help them with critical workloads.

What a Cloud Managed Service Provider does?

A managed services provider will partner with you and lead the migration effort, ensuring that data and applications are moved with minimal disruption. The provider can enable you to optimize workloads and add efficiencies without necessarily doing a complete overhaul. The right managed services provider will provide continuous management of your environment, empowering your team to focus on strategic business initiatives.

How Can Managed Services Help Businesses Achieve Business Goals?

Why do IT leaders engage a managed cloud service provider? According to a Frost and Sullivan survey, providers deliver a range of strategic benefits, including:

The question to be asked here is how much are these benefits worth to a business? Can they provide sufficient Return on Investment (ROI) to justify moving your applications to a cloud managed services provider? Let us look at the steps to be taken to answer these questions.

How To Assess ROI For Cloud Managed Services?

Given your resources, can you ensure adequate ROI? To answer that question, consider the following

  • Direct and indirect costs of your current cloud infrastructure (be it on premises or self-managed in a public cloud)
  • Direct and indirect costs of cloud managed services, as stipulated by your provider
  • Valuation of additional business benefits accrued due to the use of cloud managed services. These may include
    • Opportunity costs that result when your staff is free to focus on more strategic efforts
    • Cost and productivity efficiencies associated with deployment speed and functionality
    • Lower costs and increased revenue associated with improved customer, partner, and employee satisfaction

By evaluating the benefits you will receive against the costs of engaging a cloud managed services provider, you can calculate that ROI your company will achieve.

Step-by-Step Process Flow for ROI Analysis

You might get the best ROI by moving maximum workload to the cloud. But for analysis purposes it is best to work on one workload at a time.

Step 1: Identify the workload with migration potential

As a first step, bring in your business team and start a discussion with them to understand the issues they face with the current infrastructure. As they’re the ones who work more closely with applications or get feedback from clients, they can shed light on the issues that end users encounter, such as:

  • Systems are too slow
  • Latest updates aren’t implemented quickly
  • Costs are too high or unpredictable (when costs are borne by the business unit)
  • Reliability and availability issues due to either planned or unplanned outages
  • Security and compliance risks
  • Lack of visibility into data, due to distinct data in multiple locations

With their feedback you can come up with solutions that can help solve their problem and pinpoint workloads that need immediate attention.

Step 2: Cost Comparison

The best way to determine the ROI is to compare the cost of your current setup, whether that’s on-prem or existing self managed cloud infrastructure, with the cost of a cloud managed service provider.

For your current infrastructure, calculate the hardware, software and manpower costs needed to manage, update and run the workflow. Be sure to include the operating cost of hiring a systems expert and the training involved. You must also calculate the lost opportunity costs that stem from things like loss of revenue due to delay in rolling out a new product and the impact of poorly maintained infrastructure, all of which add to your total costs.

Next, obtain quotes from multiple managed service providers. With the initial analysis with your business team complete, you should be in a position to know exactly which workloads or tasks you want the vendor to manage. With the quotes you can start comparing the costs to run the same workload in the two environments.

Step 3: Evaluate the Business Value

Though cost is a significant factor, it is just not enough to run your workloads at a lower cost. When it comes to cloud managed service providers you should also take into account the business value they provide in terms of:

Agility: In this highly competitive environment you need faster deployment and quick responses.

Efficiency: Reduce cost and resource inefficiencies while optimizing processes.

Technology: The vendor needs to be appraised of new technology and flexible to add new technology that will keep the client competitive.

Compliance: There should be no compromise on security and compliance. A partner should be on their toes when it comes to protecting your data and applications from the latest threats.

Step 4: Value Added Services

Apart from managed services, MSP also provide other value added services which include:

  • Migration of applications and data to the cloud
  • Consultation services or business cases to move to the cloud
  • Optimizing legacy applications

These additional services add value to the vendor which saves a lot of time and resources from your end.

Final Words

At a time when budgets are being scrutinized and cost savings are the need of the day, companies might not be happy to have managed service provider as another line item in their books. But by doing a cost-benefit analysis you will find that migrating to managed cloud services will see a reduction in overall costs.

If you are not sure on how to choose a cloud managed services provider we have created a checklist to help you choose the right vendor.

Have a cloud project in mind? You can contact our certified experts to help you get your project going and ensure it is successful.