Migration Optimization Tips

3 Steps to Establish an Effective Cloud Center of Excellence

For successful cloud management, it’s important to start with a Cloud Center of Excellence to support and govern the execution of your organization’s cloud strategy. In this article, we outline three steps to establish an effective Cloud Center of Excellence for your organization.

When it comes to driving success in the public cloud, many organizations find that the biggest hurdle they must overcome is not related to technology. As the former head of Capital One’s Cloud Center of Excellence put it, “The success of cloud adoption and migrations comes down to your people—and the investments you make in a talent transformation program. Until you focus on the number one bottleneck to the flow of cloud adoption, improvements made anywhere else are an illusion.”1

To help close this gap, leading organizations are establishing a formalized Cloud Center of Excellence (CCoE), sometimes known as a Cloud Business Office, Cloud Strategy Office, or Cloud Program Office.

What is a Cloud Center of Excellence?

A Cloud Center of Excellence is a cross-functional team tasked with supporting and governing the execution of the organization’s cloud strategy. They do this by establishing policies and guardrails, driving collaboration and adoption of best practices across a range of disciplines—including financial management, operations, and security and compliance—as well as overseeing the implementation of cloud technologies and tools.

cloud center of excellence overview

Three steps to establish an effective Cloud Center of Excellence

1. Plan: Assess your current state, define roles and responsibilities

Your first step is all about planning and determining the strategy that will dictate the rollout of your CCoE. Begin by answering the following questions:

  • Who should be involved in the CCoE?
  • What are the strategic outcomes we’re trying to achieve with our CCoE?
  • Where are we today from a maturity perspective, and where do we want to be?
  • Who will be our leader? Executive Sponsor?

Assess the current state of your organization across cloud financial management, operations, and security and compliance. This will help you determine where the CCoE should focus initial efforts and give you a baseline you can use to show improvement across these functions.

CloudHealth has developed a cloud maturity framework and assessment tool that you can use to benchmark your cloud practices against peers and discover areas that need improvement (read more about the framework and take the self-assessment).

2. Build: Write your charter and define governance policies

Once you’ve formed the core team and assessed the current state, the next step is to build a charter document and define governance policies. Having a charter document to refer back to over time will be an invaluable resource as tough decisions are made. The charter doesn’t need to be a novel, but it should cover three key areas: purpose, goals/objectives, and responsibilities. You should be able to outline your goals and objectives at the start, but governance policies may take some time to develop, refine, and eventually automate.

  • Purpose: Why are we doing all of this? Typically, the purpose of the CCoE is to execute the organization’s cloud strategy. A secondary purpose may be to foster a community of practice and drive culture changes throughout the organization.
  • Goals/Objectives: The goals and objectives of the CCoE are directly linked to the organization’s cloud strategy. They should be aligned with broader business initiatives. 
  • Responsibilities: Define the actions that need to be taken to meet goals and objectives and assign ownership and timelines to each action item.

3. Run: Execute, measure, assess

With the team defined and charter written, the CCoE is ready to start guiding the organization toward more secure and cost-efficient cloud operations. Organizations that have successfully rolled out a CCoE offer the following advice:

  • Gain executive sponsorship: An executive sponsor is a critical component to the success of your Cloud Center of Excellence. This person should have good communication skills, and ideally has considerable influence at the executive table.
  • Build a community of practice: There are many ways to establish a community of practice, or a group of people sharing their cloud management experiences. Creating a regular forum for discussion will help to drive best practices and foster support for cloud initiatives. You should be inclusive and invite anyone interested in participating, no matter their role in the cloud. It’s also a good idea to bring in guest presenters with new ideas from outside the organization.
  • Go to them, don’t make them come to you: CCoE members should engage directly with engineering teams to help solve concrete problems. The goal should be to build trust and mutual understanding of each other’s challenges. The CCoE shouldn’t be a nebulous group that throws out standards and expects people to follow them. By engaging directly with engineering to solve a real problem, the CCoE member learns about the need for a resilient cloud architecture, and the engineer learns about cost and/or security concerns.
  • Provide context in reporting: It’s important to always communicate cloud metrics in business context (e.g. cost per customer). Wherever possible, you should also benchmark your organization against peers in the industry. Saying that you were able to reduce costs by 30% is a lot more powerful when you can provide the context that your peers only reduced spend by 15% in the same time frame.

Ultimately, forming a Cloud Center of Excellence will help your organization move at the speed the cloud enables without sacrificing integrity (i.e. security, reliability, performance efficiency, scalability). The CCoE team will align the cloud strategy with business goals and ensure your organization can keep up with the pace of change in the cloud.

To learn more about establishing an effective Cloud Center of Excellence, see our whitepaper: The Next Generation of Cloud Management Starts with a Cloud Center of Excellence.

1. “Cloud Adoption & Talent Transformation,” A Cloud Guru, Drew Firment, May 2, 2018, https://acloudguru.com/blog/news/talent-transformation