What ROI can you expect from cloud migration?

Before you green-light a cloud migration project, it's important to feel confident that it will deliver a good ROI. Find out how to plan for success in our article.

These days, cloud migration is so ubiquitous that some people no longer make a case for it. Surely the benefits are obvious to all? Extolling the cloud, it seems, would be like making the case for cups and saucers.

However, there's one area where the argument still needs to be made succinctly, and that's ROI. 

Whether you're the person pitching a cloud migration project or the manager being pitched to, you need to be confident that you're going to get a decent return.

It makes sense to want to be sure of this before flicking the light from red to green. While the benefits are increasingly taken for granted, there's no denying that the upfront costs can be high and that you'll experience some unavoidable disruption.

Sure, a cloud migration project will mean you're no longer pouring money into resource-heavy tasks like hardware refreshes, data centre upgrades and infrastructure maintenance. But how does that balance against the initial outlay? Can you be sure you're getting your money's worth?

We believe the answer is yes – especially if you work alongside an experienced cloud consultant who can draw up a migration plan with your specific business goals and needs in mind.

But before we take a closer look at cloud migration, let's quickly recap what ROI is and how it works in practice.

What is ROI and how does it work?

Return on investment (ROI) is a term that describes how much profit could be or has been generated from an investment.

We say "could be or has been" because there are two types of ROI – anticipated ROI and actual ROI.

Anticipated ROI is like a weather forecast. It's evidence-based and usually reliable but never a guarantee. It's calculated before the project is green-lighted and forms part of the project pitch. It seeks to answer one simple but essential question: is it worth pursuing from a financial point of view?

Actual ROI is, as the name suggests, the ROI that you end up with. It's not always going to match precisely the sum you anticipated. Profits can be knocked off course by a wide range of factors, not all of which can be predicted and prepared for. Even so, you can take steps to ensure that your prediction isn't wildly off.

Labour markets change size and shape. New regulations are introduced. Supply chains get disrupted. Your ROI can fall victim to these vicissitudes. That's why your anticipated ROI is never a single line on a graph. It's a calculation that takes into account different eventualities.

It's not rocket science – but it does take time and attention to increase the likelihood of a positive ROI. It's not for nothing that many enterprises choose to partner with a cloud consultant to give them a leg-up.

How do you measure ROI when migrating to the cloud?

There are various costs to factor in when anticipating your ROI and pitching a project to management.

First, there's initial investment. Your company may be cloud-ready – but is your IT team? Do you need to hire new talent or train existing staff? Do your staff need support adjusting to the new cloud-based environment?

Second, there's the implementation cost. This covers the basic costs of migration and modernisation along with hardware costs, rightsizing and licensing.

Finally, there's the option to seek external help to maximise your chances of success. This is another kind of investment. Outsourcing is recruitment's flip side – what they have in common is the intention to spend money to make more in the long run.

An experienced cloud consultant can help you tot up all these figures and establish what kind of ROI you can expect. They can make suggestions for the type, scale and tempo of the migration in line with your budget, goals and resources – and to avoid overspending and "cloud shock".

How does cloud migration guarantee a good ROI?

Each cloud migration is different because each company has different staff, workloads, budgets and deadlines to work around. However, there are some ways in which cloud-based solutions clearly deliver a healthy ROI.

Take cloud-based email services. Remember the days when you had a mail server sitting in a corner of the office? Do you remember what had to happen when the thing broke down or your inbox ran out of space? You had to get a Microsoft Exchange specialist in to get things back up and running.

Clearly, outsourcing your mailboxes to Google, Microsoft or another provider is going to save you money and contribute to a positive ROI.

Or how about video conferencing software like Teams? It makes it so much easier to hold conference calls, presentations and other meetings.

Any initial cloud migration pitch should include these quick wins – not only because of their benefits but also because they exemplify the broad appeal of the cloud.

Things to watch out for

We've written elsewhere about "cloud shock" – the all-too-common sight of your manager's jaw hitting the floor as they see what they've spent on cloud migration.

This pretty much only ever happens because of poor planning, insufficient knowledge of existing infrastructure and hurried decision-making.

These can, of course, be avoided by anyone who has the time, energy and resources. But many find that the best way to sidestep these pitfalls is by handing the reins over to an experienced, knowledgeable cloud consultant.

They have the expertise to thoroughly audit your existing solutions and propose a migration process that works for you. They can identify dead wood that can be thrown out before the move. And they can create a schedule that guarantees the bare minimum of downtime.

The result is a move to the cloud that pays back your investment with profits on top.

Getting a good ROI on your cloud migration doesn't have to be a mystery. Work with Ascend Cloud Solutions to ensure that you make back what you spend and then some. Get in touch today for a no-obligation consultation.