Cheriyan: Don’t Go Cloud to Cut Cost

Technology Transformation Services (TTS) leader Anil Cheriyan provided a caution to government agencies in the midst of cloud migration: don’t sprint off-prem if your main rationale is saving cash up front.

“It’s not about money. If you start out with the expense reduction piece, you’ve kind of lost your way in the beginning,” Cheriyan said today during a keynote at MeriTalk’s Cloud Computing Brainstorm.

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As the leader of TTS at the General Services Administration, Cheriyan spearheads the organization that owns the overall mission of IT modernization in government. “That’s a big deal, that’s a huge canvas, that’s a huge opportunity, and that’s why I joined,” he said

Some of his brushstrokes to date? Most recently as CIO of SunTrust Bank, Cheriyan helped establish the TBM Council, which works to standardize and optimize IT spending. He also championed digital transformation in the financial services industry, setting course for SunTrust to drive 75 percent of its workloads into the cloud in three to five years.

That background frames the same audacious course he’s set for the next stage of government’s digital transformation. But if cloud – first and foremost – isn’t about cost reduction, then why are we headed that way? Cheriyan suggested four pieces to the puzzle.

Speed: “Starting with speed is really the key piece of moving to cloud,” Cheriyan said. Driving digital transformation home requires iterating quickly, and leveraging new tools to achieve more for the mission. “It’s all about agility,” he added.

Rethinking Platforms: “The second piece is about really looking at your digital platforms and really rethinking your digital platforms, so you can find ways in which you can integrate multiple players into your systems,” he said.

New digital ecosystems are forming in the cloud, causing organizations to rethink their software, APIs, data, and on. It’s bringing business closer to their customers, and government closer to its constituents, through more interactive services.

But the road there isn’t easy. Internally, “rethinking” means grappling with resistance from business users and their beloved apps. “App portfolio rationalization is a story that all IT CIOs want to do and have failed miserably in the past,” Cheriyan said. Do we need all the legacy applications our end-users are clinging to? With cloud, it might be time to clean house. “This is the time to really start thinking about it,” he said.

Variabilization: “Near and dear” to Cheriyan, this is where his work to found and later chair the TBM Council factor strongly. “If you’re spending 80-90 percent on operating costs, you’ve got to find a way to variabilize that cost,” he said. “If everything is fixed, you really have no method by which you can shrink those costs … As soon as you start moving to the cloud, you variabilize those expenses.”

Moreso than upfront reduction – cloud brings awareness of where dollars are going. “You start understanding how to drive down expense, and you start understanding where you’re spending the money.”

And as far as the cost taxonomy that TBM provides, Cheriyan remains a strong proponent. “If you’re driving transformation without TBM, you can’t be agile. Without TBM, you can’t drive your costs down. Without TBM, you really don’t have a core business view.”

Cost Reduction: “Again I say, take this with a grain of salt,” Cheriyan said, circling back to the piece he cautioned against using as rationale. “You’re not going to save a lot of money initially … There is a bubble cost. As you start driving more applications to the cloud, you’re going to have to deal with that bubble.”

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Building the governance processes, the security, the manpower, all compound that upfront investment. Perhaps that’s why GAO noted this week that cloud cost savings have been hard to track.

“I think in the long run you’re going to save money because of the variabilization,” Cheriyan said. “You’re going to drive more value, because you’re going to build more valuable applications. You’ll be much more agile, so you’re going to drive savings in a different way. But it’s not all about ‘your mess for less.’”

So how does Cheriyan envision his organization’s role fitting those puzzle pieces together, and facilitating cloud transformation across the Federal ecosystem?

“Our TTS group is not about building all the skills. It’s about connecting with industry partners to really drive the change. We’re not interested in building a 10,000-person consulting shop. We’re going to be a small organization that really acts as the tip of the spear and connects all of the industry partners, to the agencies, to make the change happen,” he said.

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