Cloud and Data Center Modernization Uncovers Cost Savings of up to $20M

Challenge

The Office of the Chief Information Officer (OCIO) for a leading federal agency of the US government is tasked with serving 20 lines of business within the organization, as well as some external federal agencies, with IT services, cybersecurity solutions, and centers of excellence for new technologies.  The majority of the organization’s IT infrastructure was hosted on-premise, with several large data centers supporting a vast array of systems and applications. The OCIO believed business units would continue to increase their cloud adoption over time, and not all data centers would be needed. To determine this, OCIO needed support with conducting a study to determine the best course of action for the organization.  OCIO wanted to answer these important questions:

• Would cloud adoption be more cost-effective than continuing to run data centers?
• Which systems and applications would be suitable for cloud adoption?
• When should they be migrated, and in what order?
• If systems need to remain on-premise, where should they reside?
• How could the OCIO minimize the impact of such change on the organization?   

Given the multifaceted nature of enterprise cloud technology, the OCIO needed strategic guidance with both its existing IT infrastructure and potential cloud modernization for various systems.  Specifically, it had three key challenges which required the support services of an experienced partner:

• A need for objective financial analysis (cost-benefit and break-even analyses) of one business unit’s proposed purchase of a data center, in comparison to an all-in cloud migration approach for hosting systems
• Guidance and advisory services around the strategy and planning of a cloud migration for around 400 complex, high-value assets
• Support in the implementation of several mission-critical enterprise IT systems in a cloud-based context

Solution

Analysis and Advisory Services

The OCIO was approached by one of its business units to purchase a leased data center.  The OCIO’s preferred option was to shift away from managing data centers as part of its Data Center Optimization Initiative, and reduce on-premise environments by investing in cloud modernization. To determine the best course of action, it needed to determine which decision would be best for the organization.  Guidehouse conducted an objective study to analyze the financial implications of all viable options, providing support throughout the process by:

• Collecting all relevant data
• Generating cost-benefit and break-even analyses
• Evaluating the existing IT infrastructure of the organization
• Assessing key issues like the efficiency and performance of the data center
• Enabling the OCIO to make the best possible decision through unbiased evidence
• Providing strategic guidance to help demonstrate the value of the suggested approach

This study determined the most cost-effective—and, overall, most beneficial—option was to migrate high-value enterprise IT systems to the cloud, rather than purchase the data center.  

Cloud Migration Strategy

The OCIO also needed to understand how to optimize its existing cybersecurity portfolio, to reduce cost and improve the services it could deliver to its customers.  The OCIO was unsure which applications would be best suited to cloud migration, and which would be more cost-effective on-premise.  Therefore, Guidehouse supported the OCIO by developing a strategy for migrating its portfolio of more than 50 cybersecurity applications to the cloud.   As part of this service, the Guidehouse team:

• Evaluated the OCIO’s readiness to migrate to cloud
• Analyzed the workloads of each application to determine the cloud strategy
• Provided a cost analysis for cloud versus on-premise options
• Created a cloud architecture designed to deliver optimum performance and maximize ROI
• Delivered a strategic roadmap for the migration of the cyber portfolio 
  

Cloud Implementation Support 

Guidehouse also helped the OCIO with enterprise implementations of mission-critical cloud technology solutions, including organizational-wide mailbox migration and deployment of Office365.  The Guidehouse team leveraged its proven track record of success with large-scale cloud migrations to facilitate all phases of the project lifecycle, from development to testing, change management to end-user training, and has continued to provide ongoing support and maintenance throughout the transformation process.  

Impact 

Determining the Correct Strategic Decision

Guidehouse’s analysis detailed five viable options for the organization. With objective data and tangible evidence in hand, the OCIO was able to use in-depth cost-benefit analysis to clearly identify the best approach. Guidehouse’s strategic guidance and advisory services allowed the OCIO to overcome a daunting internal challenge and helped the office demonstrate the value of investing in cloud modernization to both leadership and the wider organization.

Discovering Significant Cost Savings

Guidehouse identified potential savings of up to $20 million per year for the OCIO via the most cost-effective route to cloud modernization. In contrast, the purchase of the data center would entail far greater long-term costs for the organization. Additionally, while the organization had initially deemed the cloud strategy for certain complex applications too expensive, Guidehouse was able to deploy its extensive expertise to re-architect elements of the IT infrastructure to optimize application performance, remove unnecessary licenses, and reduce the overall cost of cloud investment.

Delivering Cloud Modernization

Guidehouse enabled the OCIO to fully prepare for a valuable move away from outdated on-premise systems to a modernized cloud-based IT infrastructure— and will eventually help the office to deliver the migration and implementation of those superior cloud systems. In the meantime, Guidehouse’s support with a number of mission-critical applications has enabled the OCIO to:

• Drive greater performance
• Improve its operational agility
• Reduce IT costs
• Keep up with the pace of modern technology
• Gain competitive advantages
• Deliver better services to both its internal and external customers