AWS Smart Business Blog

A Value-Driven Cloud Adoption Explainer and Template for Small and Medium Businesses

If you have already decided to move more workloads to the cloud but aren’t sure where to begin, this explainer aims to help you. There is certainly no shortage of resources out there on cloud adoption approaches or frameworks; from tools to professional service companies, there is a lot of support available to help companies achieve their desired goals. In fact, one may argue that some frameworks may be too complex to support small and medium businesses (SMBs) that have limited cloud-savvy talent and hence generate more questions than answers.

Given the challenges related to organizational skills faced by smaller companies, SMB executives, such as CEOs, CFOs, and COOs, need to play a larger role in owning cloud adoption by fully understanding how most approaches are founded in the same set of simple principles. Cloud computing cannot happen in a silo by the IT team and should be led as an aligned effort that is mapped to strategic business outcomes, priority initiatives, organizational capabilities, and the regular measurement of the value delivered by the cloud. SMBs are exploring ways to optimize cost, improve security posture, innovate, and gain insight from data.

Research shows cloud adoption will continue to grow among SMBs, but not without challenges

Cloud technology certainly brings several benefits to organizations, especially for SMBs, including the ability to innovate faster and easily scale workloads while maintaining a keen focus on resilience and risk management. Cloud adoption across organizations of all sizes allows product teams and engineers to focus on more meaningful work and accelerate business outcomes. According to an IDC report, 60 percent of US-based SMBs plan to increase their spending on technology over the next 12 months. In Q1 2022, IDC’s Cloud Pulse survey also indicated that cloud assessment, readiness and enablement is number two in the top 10 planned short-term (12 month) investments for companies.

Most organizations face various challenges while migrating their workloads to the cloud, many of which are not based in technology but rather in people and processes. SMBs are more prone to these challenges:

  • Identifying and up-leveling organizational talent
  • Gaining executive buy-in for successful transformation
  • Bridging gaps related to perceived security or vendor lock-in concerns

According to another IDC report, the SMB Market profile indicated that “43 percent of all US SMBs do not have one full-time IT employee or equivalent in house. Of those that do have full time IT staff, the majority have between 2-4 workers.” As such, most SMB leaders are likely to make highly impactful investment decisions around technology (cloud services) while experiencing skilled resource availability challenges.

Four ways SMB executives can plan for successful cloud adoption

With effective planning, SMBs could be better positioned to succeed and minimize some of these risks. Let us explore these four focus areas for how SMB executives should look at accelerating their cloud adoption journey.

1. Prioritizing activities to support your cloud adoption journey

Everything starts by clearly articulating the business goals and objectives in order to map those objectives to a set of prioritized business and technology initiatives to attain them. Prioritizing requires an executive to ask the right questions and seek to understand the key business outcomes. These are common areas our Amazon Web Services customers reference:

  • Acquiring new customers
  • Retaining existing customers
  • Increasing operational maturity
  • Mitigating risks
  • Scaling to meet new markets
  • Reducing costs

The next step of prioritizing also focuses on identifying the programs and initiatives that would enable such business outcomes, including stakeholder alignment and defining the measurable key performance indicators (KPIs) that can later indicate successful execution. For example, a business goal of increasing revenue through new customer acquisition and faster time to market is likely to be delivered through multiple simultaneous initiatives: new product features, an increase of marketing efforts, and a geographical expansion into a new market. At the end of this phase, an executive should have a clear understanding of their top 3-4 business priorities, along with a corresponding list of initiatives to achieve them. Each initiative should have measurable KPIs defined with executive alignment and sponsorship.

2. Assessing capabilities to deliver against strategic priorities

With strategic goals and direction defined, the next step includes a deep-dive assessment of all teams that may interact with cloud workflows. These key roles will help you deliver against your initiatives:

  • Business
  • Governance
  • Security
  • People
  • Platform
  • Operations

The output from these assessments are capability gaps that need to be addressed throughout the execution of the initiatives while embarking on your cloud journey. For example, assessing capabilities against the business goal to increase revenue by releasing new product features to market faster, may identify resource gap in software release automation. The way to address this gap is to ensure that upskilling existing talent and/or identifying the right partners becomes a critical success factor to the planned initiatives being executed in a future phase.

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3. Executing effectively to deliver business outcomes

Adopting an iterative approach can deliver incremental business value and influence future investment. For example, if you’re a technology company, reducing the time to market of software may include modernizing a legacy application by turning it into smaller, easier-to-maintain services. This can help you scale efficiently and reuse in other systems that may be rolled out incrementally. It ultimately allows the ability to quickly pivot and adapt based on lessons learned and impact on the defined KPIs. Incremental business value also instills additional confidence and sponsorship from executive teams, regardless of where you are on your cloud adoption journey.

The execution phase is also the best opportunity to deliver pilot initiatives that can close capability gaps across platform, people, security, and operations that were identified during the assessment phase. Due to lack of in-house talent or the need to up-level in-house talent, a SMB is likely to bring in a partner to experiment with certain workloads. This results in an AWS Partner Network consultant delivering a pilot project that resulted in the internal engineers developing their automation skills in AWS. Now, the engineers have additional knowledge to expand operational processes across more initiatives or products that will be deployed or migrated to the cloud. If your team doesn’t have engineers in-house, you can find certified AWS Partner Network consultants to help.

4. Measuring outcomes to accelerate on your cloud journey

Define a set of KPIs that will later be used to measure the successful execution and delivery of your—you cannot change what you cannot measure. Regular objective assessment of business outcomes provides the case and justification to adjust the cloud strategy and potentially scale the use of cloud services. For example, if one of the key initiatives was a pilot project to use the cloud for automating a software release process and it resulted in a 20 percent reduction in time to market, a decision to expand this pilot to other products should be considered in the next set of priority initiatives.

Cloud adoption diagram depicting the concepts shared in this blog post

Figure 1: Focus Areas to Accelerate Cloud Adoption

A downloadable roadmap template to guide SMB executives

Use the following template to prioritize business goals and map their initiatives to business outcomes. Our customers find this helpful in aligning needs across their internal teams.

To use it most effectively, create a connection between a business goal and how it would be achieved by identifying:

  • Projects that would help achieve specific business outcomes
  • Stakeholders, executive sponsors, IT leaders, and decision makers of the initiatives
  • Metrics/KPIs to assess the success of initiatives against
  • Use cases (capabilities) that will need to be developed to execute on the initiatives

You can download this template and customize for your specific needs

Next steps

As SMBs seek to enhance their competitive advantage, there is a need to be intentional about technology strategies regardless of where the SMB is on their cloud adoption journey. Business outcomes are the key drivers for cloud adoption.

If you need help on any of the areas mentioned in this blog, you may reach out to an AWS account team. Still early in your cloud adoption journey? Learn more about how our capabilities can enhance your operations on Smart Business.