CCS336-CLOUD SERVICE MANAGEMENT UNIT-IV

UNIT V CLOUD SERVICE GOVERNANCE & VALUE

IT Governance Definition, Cloud Governance Definition, Cloud Governance Framework,

Cloud Governance Structure, Cloud Governance Considerations, Cloud Service Model Risk
Matrix, Understanding Value of Cloud Services, Measuring the value of Cloud Services,
Balanced Scorecard, Total Cost of Ownership

IT GOVERNANCE DEFINITION

IT governance definition

IT governance is an element of corporate governance, aimed at improving the overall

management of IT and deriving improved value from investment in information and
technology.

IT governance frameworks enable organisations to manage their IT risks effectively and ensure
that the activities associated with information and technology are aligned with their overall
business objectives.

Why is IT governance important?

IT governance is a set of guidelines and processes that are implemented to ensure that all the
IT activities of an organization are geared towards the achievement of its business goals. These
IT activities include how IT teams are structured, the procurement of IT assets and the
configuration of IT infrastructures.

The main desired outcomes from implementing IT governance in any given organization are
typically to:

● Ensure business value is generated by information and technology

● Oversee the performance of IT managers

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● Assess risks associated with the IT department and establish an IT disaster recovery
plan
● Provide transparency and accountability to IT operations
● Define IT project management standards
● Oversee the financial management aspects of IT such as capital budgeting and capital
spending
● Ensure IT compliance with laws and regulations
● Define standards for recurrent IT audits
● Meet the IT needs of the different departments of an organization

IT governance is a subset of corporate governance, which is its own collection of processes

that are designed to keep the entire corporation effective and efficient.

What is corporate governance?

Corporate governance is "a toolkit that enables management and the board to deal more
effectively with the challenges of running a company. Corporate governance ensures that
businesses have appropriate decision-making processes and controls in place so that the
interests of all stakeholders are balanced.”- ICSA, The Governance Institute.
A robust corporate governance framework can help you meet the requirements of laws and
regulations such as the DPA (Data Protection Act) 2018 and the GDPR.
For instance, the GDPR requires data controllers and processors to demonstrate their
compliance with its requirements through certain documentation, including relevant logs,
policies and procedures.
Harnessing the elements of IT governance will help you create and maintain appropriate
policies and procedures to help meet your data privacy requirements.

IT Governance vs. Corporate Governance

While IT governance and corporate governance may sound similar, they shouldn’t be used
interchangeably. The scope of corporate governance is much wider, as it’s in charge of defining
how an organization will be managed as a whole, while IT governance focuses on IT-related
activities.

For example, corporate governance establishes the levels of management that will guarantee
there’s accountability and leadership throughout the organization, while IT governance only
focuses on the structure of the IT team.

What Is an IT Governance Framework?

To put it simply, an IT governance framework is a roadmap that defines the methods used by
an organization to implement, manage and report on IT governance within said organization.

These IT governance frameworks have been developed by organizations such as the

Information Systems Audit and Control Association (ISACA) and the International

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Organization for Standardization (ISO). It’s important to understand that the various IT
frameworks that exist approach IT governance differently in terms of the principles, processes
and standards they use to define it.

Let’s review the most commonly used IT governance frameworks to get an idea of how each
of them works.

Most Commonly Used IT Governance Frameworks

The most common IT governance frameworks are:

● COBIT: (Control Objectives for Information and Related Technologies) This is by

far the most popular framework out there. It gives staff a reference of 37 IT processes,
with each process defined with process inputs and outputs, objectives, methods to
measure performance and more.
● AS8015-2005: A technical standard developed in Australia and published in 2005, this
framework is a 12-page framework that includes six principles for effective IT
governance.
● ISO/IEC 38500: This framework aims to assist those at the top of the organization to
better grasp their legal and ethical obligations when it comes to their company’s use of
IT.
● ITIL: Stands for Information Technology Infrastructure Library, this framework
includes five management best practices from strategy to design that aim to ensure that
IT supports core business operations.
● COSO: From the Committee of Sponsoring Organizations of the Tread way
Commission, this framework focuses on more general and less IT-focused processes,
with an emphasis on enterprise risk management and fraud deterrence.
● CMMI: Also known as the Capability Maturity Model Integration framework, this
process uses a scale of 1 to 5 to better understand how the organization is performing
and maturing over time.
● FAIR: Also known as the Factor Analysis of Information Risk, this framework has an
emphasis on cyber security and risk assessment, with the ultimate goal of making
better-informed decisions.

And that’s not the full list of frameworks out there; there are many more IT governance
frameworks that offer both a full and partial view of IT governance processes that can be useful
when it comes to the application of a solid and effective IT governance process.

IT Governance Principles

As noted, each of the frameworks listed above has its own principles, which makes it hard to
define a set of general IT governance principles. Generally, most IT auditors follow the
principles defined by two of the most popular IT governance frameworks, COBIT and ISO
35800.

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COBIT Governance Principles

The guiding principles of this IT governance framework are:

● Provide stakeholder value: IT governance should focus on the value that IT operations
generate for the business, which in turn will provide value to its stakeholders such as
shareholders, customers and employees.
● Holistic approach to IT governance: IT governance must make sure that the IT
technologies that make up the IT infrastructure, the IT roles and guidelines work
cohesively.
● Dynamic governance system: IT governance shouldn’t be rigid, but rather adapt to
the changes required by the organization.
● Governance distinct from management: COBIT draws a line between governance
and IT management, as IT governance sets the overall structure in which IT operations
will be managed.
● Tailored to enterprise needs: As stated above, IT governance should ensure IT goals
align with business goals, which can be very different from one business to another.
● End-to-end governance system: While IT governance focuses on IT departments,
managing IT data is a cross-functional effort that requires the collaboration of multiple
departments such as finance, sales and marketing, so IT governance guidelines will also
extend to other areas of business.

ISO 38500 IT Governance Principles

The guiding principles of this IT governance framework are:

● Responsibility: Roles and responsibilities should be clearly defined for effective IT

governance.
● Strategy: The IT governance strategy should be focused on achieving business results.
● Acquisition: IT governance must ensure IT assets are acquired transparently and after
careful consideration of the costs, benefits and risks.
● Performance: IT governance should define the standards to track and report whether
IT service levels meet the needs of the business.
● Conformance: One of the most important goals for IT governance is to ensure the
organization complies with regulations such as cybersecurity and IT risk management
standards.
● Human behaviour: IT policies, guidelines and standards should be designed in a way
that are understandable and achievable by the IT staff.

Common IT Governance Roles & Responsibilities

The process of establishing the IT governance of an organization starts with the corporate
governance guidelines that are set forth by the shareholders, the board of directors and the
executive management team.

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Shareholders
Shareholders are the owners of a company. They appoint the board of directors and outline the
goals of an organization from a high-level standpoint. Based on their input, the board of
directors and executives will create a corporate governance framework.

Board of Directors
The board of directors is a group of individuals who are responsible for the oversight of the
corporate governance of a business, including aspects related to IT. The board of directors acts
as the liaison between shareholders and company executives such as the chief information
officer. The board of directors approves the IT budget, establishes an overall vision for IT
governance, measures the performance of IT operations and oversees the accountability of the
IT team.

Chief Information Officer (CIO)

The chief information officer is an executive-level position that is responsible for the
management and delivery of all IT-related activities and ensuring the IT governance standards,
rules and procedures are followed. A CIO is responsible for overseeing IT operations
management, IT service management, IT asset management and IT risk management. CIOs
usually work in tandem with other executives such as chief financial officers (CFOs) and chief
operating officers (COOs).

IT Director
IT directors are the liaison between the CIO and the IT staff. While the CIO oversees all aspects
of IT from an executive level, the IT director manages the day-to-day IT operations of an
organization. Therefore, the main responsibility of an IT director is to lead the IT department
and ensure they’re following the IT guidelines defined by the CIO.

Key Terms in IT Governance

For those just getting a basic understanding of everything IT governance entails, it can be
confusing with all the industry jargon out there. Here are some of those complicated IT terms
defined.

● IT management: Not to be confused with IT governance, IT management is about how

IT resources are leveraged from a planning, organizing and directing perspective. This
is different from IT governance in that IT governance is all about uncovering what an
organization can achieve when it uses its IT resources effectively.
● IT compliance: Compliance in the IT world can mean creating an adequate defence
process that manages both the management of the compliance process as well as the
integrity of the compliance system. Therefore, IT compliance revolves around taking
control of protecting personal or private information, including how it’s kept, stored or
shared.
● IT controls: These are specific tasks performed by IT staff to ensure that business
objectives are kept top of mind.
● Governance, risk and compliance (GRC): Invented by the Open Compliance and
Ethics Group (OCEG), this term refers to a certain grouping of capabilities that combine
governance, risk management and performance to achieve reliable business objectives
and address uncertainty.

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● Good governance: This is a method of measuring public organizations’ efficacy for

the maximum public good, mostly from a political perspective. The concept of good
governance is also a key component of managing risk and ensuring compliance from
an IT perspective.
● Certified in the governance of enterprise information technology (CGEIT): This
is a certification that is vendor-neutral, and designed for IT staff in large businesses and
organizations that are responsible for IT governance.
● Information Systems Audit and Control Association (ISACA): ISACA is an
independent, non-profit that is “engaged in the development, adoption and use of
globally accepted, industry-leading knowledge and practices for information systems.”

What Are the Benefits of IT Governance?

IT managers and system administrators know technology like the back of their hands. They
work with it day in, and day out and keep up with the latest trends at all times. So, to the
administrator, it might seem like adding an IT governance process is an extra step added to
their busy days. However, there are many benefits to IT governance, including:

● Getting buy-in from stakeholders, partners and customers is never easy, but showing
that you have taken the extra step to implement an IT governance plan gives them added
assurance that you mean business.
● Controlling your risks doesn’t come automatically. It has to be studied in a working
environment where a standard, replicable process has been implemented. IT
governance helps track risks in a controlled experimental environment.
● Ensure your company is meeting rules and regulations around compliance, so you can
reduce risk and eliminate liability.
● Better align your IT department with the company’s overall business objectives, so they
can prioritize their projects better.
● Better measure performance for your IT department and optimize their processes, so
they don’t have to waste time on clunky processes that had previously been in place.

Tips for IT Governance Implementation and Planning

When it comes to IT governance, it’s best to approach the implementation and planning of a
great process by understanding that one size does not fit all. Here are some tips to get you
started.

1. Understand what role IT governance is going to play in your organization, whether it

be led by the CIOs or at the department level.
2. Start with one of the templates we defined above. There are many that give you actual
steps to take to implement successfully, like the COBIT, which gives inputs, objectives,
methods to measure performance and more. (37, to be exact!)
3. IT staff — once it’s implemented, don’t shy away from participation. It might seem like
adding extra steps to your day, but the more you can keep your department aligned with
the overall business goals, the less you have to validate your value to the company.

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CLOUD GOVERNANCE DEFINITION

What is Cloud Governance?

Cloud governance is a set of rules and policies adopted by companies that run services in the
cloud. The goal of cloud governance is to enhance data security, manage risk, and enable the
smooth operation of cloud systems.
The cloud makes it easier than ever for teams within the organization to develop their own
systems and deploy assets with a single click. While this promotes innovation and productivity,
it can also cause issues like:

● Poor integration between cloud systems, even within the same organization
● Duplication of effort or data between different parts of the organization
● Lack of alignment between cloud systems and business goals
● New security issues—for example, the risk of deploying cloud systems with weak or
lacking access control

Cloud governance ensures that asset deployment, system integration, data security, and other
aspects of cloud computing are properly planned, considered, and managed. It is highly
dynamic, because cloud systems can be created and maintained by different groups in the
organization, involve third-party vendors, and can change on a daily basis.
Cloud governance initiatives ensure this complex environment meets organizational policies,
security best practices and compliance obligations.

Why is Cloud Governance Important?

Here are a few ways cloud governance can benefit an organization running critical services in
the cloud.

Improves Cloud Resource Management

Cloud governance can help break down cloud systems into individual accounts that represent
departments, projects or cost centers within the organization. This is a best practice
recommended by many cloud providers. Segregating cloud workloads into separate accounts
can improve cost control, visibility, and limits the business impact of security issues.

Reduces Shadow IT
The risks and costs of cloud systems significantly increase if the organization is unaware which
systems and data are deployed where. It is extremely common nowadays for employees to turn
to shadow IT systems when they do not get a rapid response from traditional IT services.
Cloud governance enables employees to request cloud resources in a convenient way, yet one
that applies the relevant controls and visibility for the organization. Instead of turning to
shadow IT, employees can receive access to cloud systems, within the organization’s
compliance and budget constraints.

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Reduces Administrative Overhead

Without a cloud governance program and technology solutions to support it, organizations tend
to use spreadsheets or other manual processes to track cloud accounts, costs, and compliance
issues, or to control access and budgets for cloud resources. This is inefficient, error prone, and
breaks down at large scale.
A complete cloud governance solution enables organizations to centrally define policies and
apply them to the entire cloud infrastructure. It centralizes control over access and costs, raises
alerts, and makes it easier to respond to violations. This saves time and effort, reduces the risk
of non-compliant activities and unexpected cloud costs.

Improves Cloud Security Issues

A cloud governance model establishes an authentication strategy to protect the confidentiality,
integrity and availability of information. It allows the organization that no matter where data
exists or critical systems are deployed, there will be visibility of sensitive information and
assurances that the appropriate security controls are in place.

Cloud Governance Model Principles

The following five principles are a good starting point for building your cloud governance
model:

1. Compliance with policies and standards—cloud usage standards must be consistent

with regulations and compliance standards used by your organization and others in your
industry.
2. Alignment with business objectives—cloud strategy should be an integral part of the
overall business and IT strategy. All cloud systems and policies should demonstrably
support business goals.
3. Collaboration—there should be clear agreements between owners and users of cloud
infrastructure, and other stakeholders in the relevant organizational units, to ensure they
make appropriate and mutually beneficial use of cloud resources.
4. Change management—all changes to a cloud environment must be implemented in a
consistent and standardized manner, subject to the appropriate controls.
5. Dynamic response—cloud governance should rely on monitoring and cloud
automation to dynamically respond to events in the cloud environment.

How to Design and Implement a Cloud Governance Framework

Fig :1 Components of a Cloud Governance framework

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The following are the primary components of a cloud governance framework.

Components of a cloud governance framework

Cloud Financial Management
In many organizations, cloud costs quickly get out of hand. Cloud services often promise to
reduce IT costs, but this only holds true if costs are duly managed. There are three elements of
cloud financial management:

● Financial policies clarifying how the organization plans to use the cloud. For example,
policies can define in which cases managed services should be used to reduce in-house
operating costs, or specify a cost management checklist that must be followed before
deploying new cloud services.
● Budgets define the specific allowance for different parts of the organization or different
categories of cloud services.
● Cost reporting is difficult to achieve in a consistent way. Some cloud services have
unpredictable charges that can appear in different places of the cloud infrastructure—
for example, cloud snapshots used for backup can be stored across different regions and
accounts. You can use cost reporting tools provided by the cloud vendor, or adopt third
party tools that cover multiple clouds.

Cloud Operations Management

Operations management involves defining processes for deployment of services. These
processes should include:

● A clear definition of resources allocated to the service over time

● Service-level agreements (SLAs) to define expected performance
● Ongoing monitoring to make sure SLAs are met
● Process and required checks before deploying code to production
● Access control requirements

Strong cloud operations management is an excellent way to prevent shadow IT. It can conserve
costs by preventing unnecessary use of cloud resources, and can dramatically improve the
return on investment of cloud expenditure in the long term.

Cloud Data Management

The cloud makes it easier to collect and analyse huge amounts of data, but this makes data
management a much bigger challenge. Cloud governance should specify how to manage the
entire data lifecycle in the cloud. This includes:

● Building a data classification scheme, and setting policies for data at different levels of
sensitivity
● Ensuring all data is encrypted, at rest and in transit
● Putting in place appropriate access controls for each type of data
● Using data masking to reduce the risk of sensitive data when it is used for scenarios like
development, testing, or training

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● Developing a tiering strategy, moving data over time from high cost fast access systems
to lower cost archival systems
● Ensuring that data lifecycle management is automated—this is critical to apply policies
in large scale cloud deployments

Cloud Security and Compliance Management

Cloud governance takes responsibility for all the key topics of enterprise security. It determines
what are the organization’s security and compliance requirements, and ensuring they are
enforced in the cloud environment:

● Risk assessment
● Identity and access management
● Data management and encryption
● Application security
● Disaster recovery

Cloud governance should strike a balance between business drivers and requirements, real
security risks, and the requirements of compliance standards. It should use existing policies
and security practices, extending them to the cloud and translating them to the cloud
environment.

CLOUD GOVERNANCE STRUCTURE

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Introduction

Cloud governance structure refers to a set of policies, principles, and controls that guide the
adoption, usage, and management of cloud technology services within an organization. Let’s
delve into the details:
1. Definition:
 Cloud Governance: It encompasses the rules and guidelines that organizations create
to monitor and amend as necessary in order to control costs, improve efficiency, and
eliminate security risks associated with cloud usage.
 It is an ongoing process that must sit on top of existing governance models.

2. Need for Cloud Governance: Implementing cloud governance helps organizations address
several critical issues:
 Security and Privacy Risks: Unauthorized downloads, installation of software,
storage of illegal data, and access to restricted sites by users can pose security and
privacy risks. Cloud governance solutions cover multiple security components,
including encryption, security groups, audit trails, application access rules, and access
controls.
 Vendor Lock-In: Organizations may become overly dependent on a single cloud
service provider due to contractual clauses. By making changes to service level
agreements (SLAs) and reducing reliance on a single vendor, organizations can
maintain flexibility.
 Cloud Sprawl: When different departments use various programs and cloud
infrastructure without involving the IT department, it can lead to fragmented,
redundant, inefficient, and unmanaged cloud resources. Proper governance helps detect
and restrict such sprawl.
 Shadow IT and Unwarranted Usage: Employees not following IT-imposed rules can
result in security breaches and fragmented control throughout the organization.
Effective governance ensures compliance.
 Lack of Data Portability and Interoperability: Ensuring compatibility between cloud
services and other software outside the organization is crucial to prevent inefficiencies
and chaos.

3. Components of Cloud Governance:

 Financial Management: Aligns with cloud cost management principles, helping
organizations manage expenses effectively.
 Automation and Orchestration: Ensures smooth cloud operations by automating
processes.
 Continuous Compliance: Maintains adherence to security and regulatory
requirements.

What is Cloud Governance?

It is a set of rules. It applies specific policies or principles to the use of computing services.
This model aims to secure applications and data even if located distantly. The best solutions
include People, Processes, and Technology. It basically refers to the decision-making
processes, criteria, and policies involved in the planning, architecture, acquisition, deployment,

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operation, architecture, acquisition, implementation, operation, and management of a Cloud

computing capability. Its best practices help to optimize the organization's:

● Operations: Doing it efficiently

● Risk and compliance: Doing it securely
● Financial: Doing more with less

Why it is Important?

The below-mentioned points are the importance of Cloud Governance

Make it easier to manage resources

Cloud service providers like AWS ( Amazon Web Services Solutions) and many others are
now advising customers to move multiple-tenant workloads residing in a single account or
subscription into different accounts. Using various accounts will manage distinct workloads,
one of the best practices today to deliver precise access, control, and cost management.
Moreover, using its best practices limits an issue's security and financial blast radius. Using the
correct Governance Model of Cloud Services helps organize the volume of accounts most
organizations need and provide visibility around key online activities and trends.

Helps curb shadow IT

Risk and spending increase when you do not understand what systems are in use or where
corporate data resides. Whenever a delay occurs in getting access to resources, employees turn
to shadow IT. It is helpful as it places the required framework to request and access resources
quickly. It gives team members access to the breadth of allowed resources among compliance
and budget constraints.

Reduces labor
Instead of using spreadsheets or any other similar manual processes that track accounts, cost,
and compliance, the other way is to set guardrails at the appropriate point in your organizational
hierarchy: these guardrails control access, budget, and policy of the required projects. In
addition to this, complete solutions offer enforcement actions that allow you to do away with
necessary follow-up actions after receiving an alert. Following best practices save time and
effort as it prevents non-compliant activities and budget overruns.

What is the Governance Policy?

Governance policies contain a set of protocols of how things should be regulated on it. So, its
policies should be created and regularly reviewed by business executives, managers, and IT
experts.

The Cloud Governance policy must include the following:

● Standards for the design of infrastructure

● Monitoring of infrastructure and application

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● Security Policy
● Programming standards
● Backup recovery services

Certain sensitive information and data should be restricted to all unauthorized users. Therefore,
one should use proper authentication and permission level checks.
A Cloud Governance Model should be a proper roadmap for your cloud consumption, how you
plan a new deployment policy, how you will switch your application from one provider to
another, what will be the deployment process, and who will evaluate them.
This plan operates over four levels, listed below: -

● Infrastructure or virtualization platform

● Operating systems
● Platform/application
● Business/user activity on that platform

A firm policy will help you run the business well; otherwise, it will result in security loopholes,
reduced performance, and permanent data loss. This is why choosing the best solutions and
following best practices are essential.

Conclusion
In summary, a well-defined cloud governance framework manages risks, enhances data
security, and enables efficient cloud system operations for businesses

CLOUD GOVERNANCE CONSIDERATIONS

Considerations for Cloud Governance

Governance is continually evolving, as it should. With constantly changing laws and

regulations, the advancement of technology, and evolving partner and customer requirements,
the ways in which organizations manage their systems and processes must also adapt. With this
in mind, as organizations make the shift from primarily on-premises platforms and customized
tools toward software-as-a-service (SaaS) and cloud-based, often distributed infrastructure
models, governance strategies must also change. This is especially true in the adoption of
Microsoft’s Office 365 communication and collaboration platform.

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Defining Governance

Governance is the rules, policies, procedures, and responsible parties that dictate how to
operate, maintain, and expand a given area of technology.
Governance is all about the company culture, no two companies have the same company
culture. The culture can change; a company does something always one way but doesn’t mean
can’t change to have more effective governance. As time and technology changes, your culture
changes as well: prepare your users for that. If culture changes in the background and users
don’t see it as a big culture shock or change then it becomes part of a normal process and less
disruptive.
Planning for the Cloud

The cloud offers a number of benefits for companies, from reduced capital budgets and
headcount expenses to web platform elasticity that allows you to quickly spin up and scale out
cloud platforms and solutions to meet rapidly changing customer’s needs. However, many
organizations are jumping directly into the cloud without fully understanding the impacts.
As many of your favourite technology solutions transition toward the cloud, companies need
to also make some adjustments to their expectations about how they manage these services —
and how management differs from on premises solutions where you own the hardware and
maintain the software directly. The key to taking advantage of the cloud is to understand and
align your business requirements with the cloud in mind. Understand that not every workload
(such as email, team collaboration, ticketing, etc) can be moved immediately into the cloud.
Instead, many of your business-critical systems should be transitioned over time (called the
‘hybrid’ model) to ensure that data security, compliance and sovereignty issues are being met.
Most technology mistakes are made when you do not adequately understand your business
requirements, and therefore do not fully understand the risks of taking action (and of not taking
action).
Take a look at the tools and systems you use today, and figure out which ones could save you
time and money by moving them to the cloud. Focus first on moving mature solutions to the
cloud (minimizing the risk of moving), then investigate new capabilities not already in-house
(minimizing the cost of trying new solutions). Leave the high risk, in-house solutions until last.
As you look at vendors, look carefully at what they office, who they support, and how long

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they’ve been in business. Look for partners with the strongest service level agreements (SLAs).
And always look for specialization.
As you prepare to move key workloads to the cloud, there are some governance considerations
which can be applied to most tools and systems:
 What happens to your existing reporting and metrics?
 Do the same KPIs apply to your new cloud components, or do they need to be
reevaluated?
 Are there any changes to your ability to manage permissions across your on
prem and cloud components? Are the methods different?
 Do your existing policies remain in effect, or do you need to adjust for two
models (old system and new)?
 Can you maintain visibility into and control over your information
architecture?
 Are you able to track storage usage and growth?
 What happens to your auditing and compliance monitoring capability? Can
you still see what is being accessed, and by whom?
 With your social capabilities, how much visibility do you have into how users
are interacting, where content is being shared, and how well collaboration is
being achieved?
 If moving content and users between platforms, how much visibility will you
have around storage, content, and user activity?
 Are you able to set up management policies and procedures that span the
various systems?
 Are you able to organize and automate complex preventive and responsive
actions?

While moving core components of your IT infrastructure to the cloud may make financial
sense, it is important to understand the impact to your governance model, and your ability to
actively manage and administer your environments — whether in a hybrid model, or when
moving entirely to the cloud. Few vendors offer a “federated” view between old on premises
solutions and new cloud solutions, requiring you to maintain separate reporting, compliance,
and auditing plans for each. Understand the overhead of managing a hybrid model, and what
changes if you move entirely into the cloud.

Prioritizing Governance Planning

As you begin to consider moving aspects of your IT systems to the cloud, make governance a
priority. You need to look at your systems holistically (with a business perspective) regardless
of where your servers sit. Document your business requirements — clarify and permissions,
information architecture, templates, taxonomy — and ownership of each. Define what policies,

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procedures, and metrics are needed to manage your environment, and then look at what is
possible across your cloud and on premises instances. As Stacy Deere-Strole states:

Governance consists of the processes and procedures that an organization needs to follow to
ensure that the users are being taken care of in a good time frame, and to follow established
security protocols and consistent processes. Consistency is the biggest thing regarding
governance; you need to have everything documented the same way, which helps you better
define the return on investment (ROI) of the platform, as well as a stronger ability to meet time
frames and complete tasks when delivering and supporting Office 365.

A well-defined cloud governance framework is essential for organisations to effectively

manage their cloud resources and ensure compliance, security, and cost control.

The key principles that underpin a robust cloud governance framework include:

 Alignment with business objectives.

 Clear ownership and accountability.
 Policy development and enforcement.
 Risk management.
 Compliance and regulatory adherence.
 Security controls.
 Cost optimisation.
 Resource lifecycle management.
 Resource tagging and labelling.
 Performance monitoring and optimisation.
 Data management and privacy.

A well-structured governance framework that incorporates these principles helps organisations

effectively manage their cloud resources while balancing security, compliance, and cost
considerations. It provides a solid foundation for a successful cloud strategy and its
management.
Cloud governance implementation challenges

Implementing cloud governance can be a complex and challenging endeavour. While the
benefits are substantial, several challenges may arise during the implementation process.

These challenges can vary depending on the organisation’s size, industry, and specific cloud
adoption goals.

Some of the most common challenges associated with cloud governance

implementation include:

Complexity of Cloud Ecosystems:

Cloud environments can be highly complex, with multiple cloud service providers, regions,
and services. Managing this complexity can be daunting, but the implementation of

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centralised governance practices and tools will provide visibility and control across the entire
cloud ecosystem.

Lack of Governance Expertise:

Many organisations lack in-house expertise in cloud governance best practices and tools,
making it challenging to develop and implement effective governance strategies. A good
solution is to invest in training and skill development for IT staff or consider partnering
with cloud governance consultants or service providers to bridge the expertise gap.

Resistance to Change:
Employees and teams may resist changes in processes and policies brought about by cloud
governance, leading to slow adoption or non-compliance. A solution here is to communicate
the benefits of cloud governance clearly to all stakeholders, provide training and support, and
involve teams in the governance framework’s design and implementation to gain their buy-in.

Resource Tagging and Labelling:

Ensuring consistent resource tagging and labelling practices across the organisation can be
challenging, leading to difficulties in tracking resources, cost allocation, and governance
enforcement. A way to go about it is to implement automation and enforce tagging policies
using cloud provider tools or third-party solutions.

Balancing Security and Innovation:

Striking a balance between robust security controls and the need for innovation and agility
can be a challenge. Overly restrictive security policies may hinder innovation. A good
solution is to develop a risk-based approach to security that allows for flexibility while
maintaining critical security measures.

Shadow IT:
When employees or departments independently procure and use cloud services and resources
without the knowledge or approval of the central IT or governance teams, it can create
visibility, security, and compliance gaps within the organisation. Addressing this challenge
requires establishing clear policies, education, and monitoring to ensure that all cloud usage
aligns with organisational standards and requirements.

Manual work:
The reliance on time-consuming, manual processes for managing cloud resources and
policies leads to inefficiencies, errors, and difficulties in keeping up with the dynamic nature
of cloud environments. To overcome this challenge, organisations need to embrace
automation and orchestration solutions to streamline tasks like provisioning, scaling, and
policy enforcement, enabling greater agility and control over their cloud infrastructure.

Overcoming these challenges requires a well-thought-out cloud governance strategy,

collaboration among different teams and stakeholders, and ongoing monitoring and
adaptation as cloud environments evolve.

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To address these challenges effectively, cloud governance should be viewed as an ongoing

process rather than a one-time project.

CLOUD ADOPTION

Cloud governance is an integral part of cloud adoption, ensuring that organisations can harness
the benefits of the cloud environment while mitigating risks and maintaining control over their
cloud resources and data.

It provides a structured approach to adopting and managing cloud services in a secure,

compliant, and cost-effective manner.

GOVERNING DATA IN THE CLOUD

Governing data in the cloud is a critical aspect of cloud governance, especially considering the
sensitivity and importance of data in modern business operations.

Effectively managing data in the cloud environment involves a combination of policies,

practices and technologies to ensure data security, compliance, availability, and privacy.

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Some key considerations for governing data in the cloud include data classification, data
encryption, access control and authentication, data privacy and compliance, data backups and
recovery, data lifecycle management.

By implementing robust data governance practices, organisations can maintain data

integrity, security, and compliance while harnessing the benefits of cloud technologies.

How to begin, what’s the end game?

Beginning cloud governance involves a structured approach to define policies, processes, and
controls for managing cloud resources effectively, securely, and in alignment with
organisational goals.

The end game is to establish a well-defined framework that enables continuous

optimisation, risk mitigation, and efficient use of cloud resources while ensuring data
security, compliance, and cost control. What’s in the middle is a long process and hard work,
best if done by professionals with adequate experience.

UNDERSTANDING THE VALUES OF CLOUD SERVICES

According to Business Insider, cloud services are becoming "the new normal" for companies
during the pandemic. Because cloud services are available on-demand over the internet, they
help companies transition to digital operations that support a remote workforce. The cost-
efficiency of the cloud also helped organizations keep their heads above water during the
financial downturn in the early months of the pandemic.

Companies are embracing a cloud-first approach to IT, taking advantage of cloud services such
as Infrastructure as a Service (IaaS), Software as a Service (SaaS), and Platform as a Service
(PaaS). Cloud services continue to expand and evolve as business needs change.

But what is it about cloud services that enable them to transform businesses and give them
staying power in a time of crisis?

Cloud services have some key features that help companies migrate to the cloud and make the
most of the cloud no matter what stage of the journey they are in. Organizations can align cloud
services to their business goals to stay competitive in trying times.

Here's an overview of 5 main features of cloud services.

1) Scalability
Like all aspects of the cloud, cloud services are highly and easily scalable. Instead of going
through a long process of requisitioning and implementing hardware and software, your
company can request new cloud resources when you need them and downgrade when the need
passes. Right-sizing services help your company determine what cloud resources are needed to
meet your requirements for storage, workloads, or running applications.

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2) Resiliency
Cloud-based storage, backup, and disaster recovery enable your company to protect data and
maintain business continuity. Disaster Recovery as a Service (DRaaS) provides off-site backup
and instant failover. Resiliency is crucial for staying competitive. Clients and customers expect
your company to be available at all times. Making the right business decisions depends upon
accessing accurate, complete, and current data.

3) Optimization
Optimization services ensure that companies that are already in the cloud get the most value
out of their cloud investment. Many companies let cloud resources lay idle, wasting money.
Cloud services include assessments that identify areas where cloud assets are being
underutilized. Data analytics produce insights about cloud usage that empower your company
to develop a roadmap toward a more cost-effective and strategic approach to cloud.

4) Maturity
Cloud services can help your company raise your level of digital maturity through cloud
delivery. Cloud services are available for organizations at every stage in the cloud journey,
from those that are thinking about migrating to those that are looking to adopt a cloud-first
approach to IT. Cloud delivery digitalizes operations, making business processes compatible
with today's remote workplaces.

5) Collaboration
For companies that have made the transition to a remote workforce, cloud services provide the
tools they need for business collaboration. SaaS offerings include file sharing, mobility
management, and unified communications solutions. Using these cloud-based tools, employees
can communicate and work together on projects no matter where they are located. Increased
collaboration leads to innovation and boosts employee satisfaction.

Let’s explore the value of cloud services and how they impact organizations:
1. Cloud Value Measurement Model (CVMM):
○ The Cloud Value Measurement Model (CVMM), developed by Tata
Consultancy Services (TCS), provides a pragmatic approach for continuous
cloud value measurement.
○ Key dimensions evaluated by CVMM include:
■ Technology Modernization: Assessing cloud foundation and
modernization services, including security, infrastructure, application
modernization, DevSecOps, serverless computing, and data analytics.
■ Process and Governance: Uncovering cloud governance and processes,
such as cloud cost, policies, security, guardrails, and compliances.
2. AWS Cloud Economics:
○ AWS Cloud Economics emphasizes that the value of using Amazon Web
Services (AWS) extends beyond cost savings.
○ AWS customers experience significant improvements in areas such as:
■ Staff Productivity: Focusing employees on differentiating and value-
added work.
■ Operational Resilience: Improving the reliability and security of IT
infrastructure.

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■ Business Agility: Being more agile and responsive to customer needs.

■ Leveraging cloud resources efficiently.
○ The Cloud Value Framework helps organizations understand the business
impact of migrating to or building on AWS.

3. Value Curve Analysis:

○ In cloud computing, a value curve can analyse and compare the value
propositions of different cloud service providers.
○ Attributes evaluated include performance, scalability, reliability, security, cost,
ease of use, and support.
4. Fundamental Categories of Cloud Services:
○ Understanding the three fundamental categories of cloud services is pivotal for
unlocking their true potential:
■ Infrastructure as a Service (IaaS): Provides virtualized computing
resources (e.g., servers, storage, and networking).
■ Platform as a Service (PaaS): Offers development platforms and tools
for building and deploying applications.
■ Software as a Service (SaaS): Delivers ready-to-use software
applications over the internet.
In summary, cloud services empower organizations by enhancing productivity, agility, and
resilience while optimizing costs. Whether it’s AWS, other cloud providers, or a combination,
organizations must strategically evaluate and measure the value they derive from cloud
computing

MEASURING THE VALUES OF CLOUD SERVICES

Measuring the Value of Cloud Services is crucial for organizations as they navigate their digital
transformation journeys. Let’s explore some approaches and frameworks:
1. Cloud Value Measurement Model (CVMM):
○ The Cloud Value Measurement Model (CVMM), developed by Tata
Consultancy Services (TCS), provides a pragmatic approach for continuous
cloud value measurement. It enables business transformation and innovation by
assessing cloud value across various stages of adoption.
○ Key dimensions evaluated by CVMM include:
■ Technology Modernization: Assessing cloud foundation and
modernization services, including security, infrastructure, application
modernization, DevSecOps, serverless computing, and data analytics.
Metrics measured include reduction in mean time to recover (MTTR),
security incidents, cloud-native utilization index, and adoption of AI,
ML, and IoT technologies.
■ Process and Governance: Uncovering cloud governance and processes,
such as cloud cost, policies, security, guardrails, and compliances.
Metrics measured include reduction in total cost of ownership (TCO),
cost savings, disaster recovery metrics, SLAs, and compliances.
2. Dynamic Value Paradigm:

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○ Organizations need to incorporate a dynamic value perspective. Cloud benefits

evolve over time, and what it brings today may differ from tomorrow.
Evaluating cloud value realization requires ongoing assessment and alignment
with best practices.
3. Holistic Comparison:
○ When cloud services coexist with traditional IT, it’s essential to compare value
holistically. Consider both cloud-based and traditional services to understand
the overall impact on business goals.
In summary, measuring cloud value involves continuous monitoring, strategic planning, and
adapting to changing technology landscapes. By leveraging frameworks like CVMM,
organizations can unlock the full potential of cloud services and drive innovation across their
business.

BALANCED SCORECARD

Certainly! Let’s explore the Balanced Scorecard (BSC) in the context of cloud governance
frameworks.
1. COBIT 2019 and the IT Balanced Scorecard:
○ COBIT 2019 is an overarching framework for the governance and management
of information and technology (I&T). It provides tools for customizing and
implementing governance structures within enterprises.
○ The Balanced Scorecard (BSC), originally used for performance management,
has been adapted to I&T. It goes beyond traditional financial indicators and
evaluates other areas such as customer satisfaction, employee turnover, internal
processes capabilities, and the ability to learn and improve.
○ The IT Balanced Scorecard (IT BSC) applies BSC concepts to I&T. It helps
organizations decompose their strategies into measurable indicators and track
progress across various perspectives.
○ Designing an IT Balanced Scorecard Using COBIT 2019 involves a four-step
process that tailors the governance system for I&T based on factors like
frameworks, regulations, and specific enterprise focus areas1.
2. Advantages of the Balanced Scorecard Approach:
○ Empowers CISOs (Chief Information Security Officers) and their teams to
focus on critical issues.
○ Recommends activities aligned with business priorities.
○ Facilitates security state analysis, data aggregation, correlation, automation, AI-
based defense policies, and multi-factor authentication (MFA) to prevent
breaches2.
3. Integrating BSC into IT Governance Metrics:
○ By integrating the BSC framework into IT governance, IT professionals can:
■ Align their work with strategic goals.
■ Drive efficiency and innovation.
■ Measure and communicate their contributions to organizational
success3.
4. Green IT Governance and the Balanced Scorecard:

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○ The BSC can be applied to Green IT within the context of IT governance.

○ It helps organizations construct BSCs specific to Green IT initiatives, such as
virtualizing data centers.
5. Enterprise Governance of IT Using the Balanced Scorecard:
○ The BSC is a performance management system that enables businesses to drive
strategies based on measurement and follow-up.
○ It ensures a balanced view of enterprise performance across various
dimensions5.
In summary, the Balanced Scorecard provides a holistic approach to evaluating and managing
IT performance, aligning it with strategic goals, and ensuring a comprehensive view of
organizational success.

TOTAL COST OF OWNERSHIP

Moving your workloads to the cloud can come with a wide array of improvements. Flexibility,

scalability, efficiency, and innovation can all be aided by the cloud. However, if a team isn’t

mindful of the resources they’re using, the total cost of cloud computing services can become

unmanageable. We’ve compiled an ultimate guide to help you reduce your cloud TCO and

build a more cost-effective environment in the public cloud.

What is Cloud Total Cost of Ownership (TCO)?

Cloud TCO stands for cloud total cost of ownership. The cost of everything needed for cloud

computing services should be included in this total: infrastructure costs, support costs, software

licensing, data storage, network bandwidth, and personnel expenses. Any tools or human

resources needed to adopt, migrate, operate, manage, and optimize the cloud environment

should also be considered in the Cloud TCO.

Why is Cloud TCO Important?

One of the major reasons organizations move their workloads to the cloud is to reduce the costs

compared to managing their own on-premises environments. However, if you migrate to the

cloud and don’t pay attention to what you’re spending, the anticipated cost-savings can

diminish. Calculating cloud TCO before a migration project allows organizations to assess the

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financial implications of migration and determine if the cloud is the right choice for their

specific business needs.

Cloud TCO is also important to understand after you already have a cloud environment.

Knowing your cloud TCO can help you make better strategic decisions, make choices between

different cloud platforms, and identify opportunities to optimize expenses associated with

cloud. Additionally, having a clear understanding of the cloud TCO helps companies

proactively manage costs and identify potential areas for optimization, which maximizes the

benefits of cloud investments.

15 Factors for Calculating Cloud TCO

When calculating your cloud total cost of ownership, you need to consider your current

environment, the costs of migration, and what you might have to spend upfront versus on an

ongoing basis to maintain your new environment. All direct and indirect costs should be

included in your calculations:

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1. Infrastructure Costs

Start by understanding the costs of your current IT infrastructure. This can include physical

servers, other hardware, and any accessories and equipment needed to run your infrastructure.

If you’re moving from an on-premise environment to the cloud, you need to factor cloud

infrastructure costs, such as virtual machines (VMs), networking, load balancers, etc., into the

TCO model as well.

2. Storage Costs

How much does it currently cost to store your data and workloads? You can use this

information to calculate what storage might cost with a public cloud provider. This involves

assessing the storage capacity needed, the type of storage (object storage, block storage, etc.)

and any associated data transfer costs.

3. Network Costs

In a cloud TCO model, network costs refers to the expenses associated with operating and

maintaining the computer network infrastructure. These costs can include factors like:

● Bandwidth utilization

● Network equipment

● Network monitoring tools

● Data transfer fees

Although network costs are typically included within the pricing package of a cloud service

from a cloud provider, it’s crucial to understand exactly how the provider has structured its

pricing model for network usage. The TCO for network-related expenses, when compared to

an on-premises data center, is typically lower in the cloud due to the economies of scale and

shared infrastructure offered by public cloud providers.

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4. Backup and Recovery Costs

With legacy frameworks, the business is responsible for all backup and recovery costs. Backup

and recovery might be managed by internal employees or implemented by a third-party vendor.

Many, if not all, public cloud providers offer backup and disaster recovery (DR) services which

can be baked into the overall pricing for their cloud services or deeper levels may be offered

for an additional cost.

5. Security and Compliance Costs

Security with your current system can include physical security measures, such as keycards

and security cameras. It can also entail digital security measures, like firewalls. While you’re

likely to still have some security and compliance costs post-migration, most cloud providers

meet all common compliance standards and have some security measures in place.

6. Cloud Migration Costs

Moving to the cloud includes a lot of moving parts, so much so that it requires its own strategy

and pricing. While it’s a one-time expense, you’ll want to factor in how much it costs to migrate

your workloads to the cloud, including the expenses related to data migration, application re-

architecting, and any professional services required during the migration process.

Application migration will also be part of your cloud migration costs. If the application needs

to be re-platformed or completely rebuilt from the ground up, this will be a more expensive

endeavor than if it’s able to move to the new cloud environment without much development

time.

Keep in mind that every migration is unique and there’s always a possibility for unforeseen

challenges to arise. However, practices like careful planning, thorough testing, collaboration

with experts, effective communication, and working from a well-defined strategy can reduce

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the likelihood of disruptions. With that, calculating the cost of total switch time should also be

done by taking into account potential downtime, labor costs associated with migration, and

hours lost.

7. Sunk Costs

Sunk costs are hard for people to walk away from. It’s easy to feel like you need to hold on to

hardware you’ve purchased and stick with other large investments you’ve made versus walking

away and choosing a different way of running your workloads. However, this rigidity and

desire to stick to what’s already in place can cost you in the long term. As other businesses

innovate and modernize their applications and environments, you’re setting yourself up to be

behind the curve. Some sunk costs are inevitable in the course of migrating to the cloud.

8. Operations and Maintenance

When moving to the cloud, much of the tasks associated with hardware management (hardware

maintenance, updates, repairs, etc.) is shifted from IT teams to the cloud service provider.

However, the cost of personnel to manage and maintain the cloud environment, including cloud

architects, administrators, security professionals, and other IT staff, along with training and

upskilling of employees, should be considered within the cloud TCO. These items would either

need to be handled in-house or outsourced to a third-party or managed services.

9. Ancillary Services

There are additional solutions and services that, if needed to be purchased, should be accounted

for in a cloud TCO model, such as:

● Cloud monitoring and cloud analytics tools

● Security services (SIEM, IAM, data encryption, etc.)

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● Compliance services (i.e. certifications, audit controls, data privacy measures,

compliance reports)

● Managed services

● AI and machine learning

● Database services

● Developer tools and APIs

10. Service Level Agreements (SLAs)

Depending on their requirements, organizations may choose higher service levels that require

additional costs to ensure availability, performance, and support. For example, organizations

with mission-critical applications may opt for higher availability SLAs to decrease downtime

and mitigate potential revenue loss. On the other hand, organizations with performance-

sensitive workloads, like real-time applications or data-intensive processing, may need SLAs

that revolve around higher-performance that focus on ensuring optimal application

performance.

11. Application License Fees

While you may have had application license fees before, in on-premises environments, they’re

usually one-time costs. Applications that run in the cloud are typically subscription-based, just

like cloud costs. However, keep in mind that application licensing terms and conditions vary

among software vendors and cloud providers.

Before migrating applications to the cloud, it’s crucial to carefully review existing software

licenses, consult with software vendors, and take into account any specific licensing

requirements or options offered by the cloud service provider. Doing so ensures compliance

with licensing agreements, optimizes license utilization, and helps avoid sudden licensing

issues within the cloud environment.

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12. CapEx Elimination Costs

Cloud migration means you are moving your business, at least in part, from a CapEx model to

an OpEx model. Capital expenditures (CapEx) include equipment that you own – your data

center infrastructure, for example. With operating expenditures (OpEx), you don’t pay to own

equipment. Instead, you pay for what you use. The TCO model for cloud wouldn’t include

costs associated with CapEx.

Moving from a CapEx to an OpEx model means that your organization will now have to pay

monthly costs to a cloud provider, or other forms of subscription and licensing fees, for the use

of service, as well as access to support. One of the outcomes of a cloud migration project is

that these monthly cloud costs are often lower than the CapEx costs when spread out over a

number of years.

13. Cloud Adoption and Increased Agility

If all goes well, cloud adoption should increase organizational agility, scalability, and elasticity,

making certain processes more efficient, resulting in:

● Improved performance

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● Opportunities for automation

● Better integrations

● The ability to leverage advanced cloud features and services, i.e. AI and machine

learning

This internal time saved has true cumulative value, and the better you are able to pinpoint how

much time you’ve saved from no longer needing to engage in tedious workflows or engage in

repetitive tasks, the more expenses saved should decrease your cloud TCO.

14. Consulting Costs

Chances are, you don’t have all the in-house expertise needed to complete a cloud migration.

Organizations may need to consult with a number of specialists when they move to the cloud,

including cybersecurity experts, managed cloud providers, migration pros, and more. These

consulting costs need to be included in the cloud TCO.

15. Project Risk

Embarking on a new project always comes with unforeseen consequences, and that’s all part

of project risk. Changes in requirements, unexpected delays, and cost overruns can all be risks

that tack on additional costs. While you might not be able to calculate this with a fine degree

of accuracy, you may be able to estimate the cost of the potential risk by looking at other,

similar projects and speaking to migration experts.

5 Ways to Reduce and Optimize Cloud TCO

Although migrating to the cloud can offer initial cost savings, ongoing cloud cost optimization

to reduce spend requires active evaluation and management.

● Rightsizing Instances and Autoscaling: Rightsizing instances ensures that you pay for

discounted instances based on your resource needs, avoiding overprovisioning waste.

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Autoscaling allows you to dynamically adjust resources based on demand, ensuring

efficient resource utilization.

● Optimized Workload Placement: Some instances are optimized for certain types of

workloads. While some instances are general purpose, others are optimized for

memory, compute, or storage. Placing your workloads where they’ll be best optimized

can reduce your cloud TCO.

● Managed Services: Managed service providers may feel like an added expense, but

working with experts who specialize in optimizing cloud costs can provide a strong

return on investment for your business.

Although migrating to the cloud can offer initial cost savings, ongoing cloud cost optimization

to reduce spend requires active evaluation and management.

● Rightsizing Instances and Autoscaling: Rightsizing instances ensures that you pay for

discounted instances based on your resource needs, avoiding overprovisioning waste.

Autoscaling allows you to dynamically adjust resources based on demand, ensuring

efficient resource utilization.

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● Optimized Workload Placement: Some instances are optimized for certain types of

workloads. While some instances are general purpose, others are optimized for

memory, compute, or storage. Placing your workloads where they’ll be best optimized

can reduce your cloud TCO.

● Managed Services: Managed service providers may feel like an added expense, but

working with experts who specialize in optimizing cloud costs can provide a strong

return on investment for your business.

● Identifying and Eliminating Wasted Resources: Regularly monitoring your cloud

environment allows you to identify underutilized or idle resources. By eliminating these

wasted resources, you can optimize costs and ensure efficient resource allocation.

● Cloud Cost Management Tools: Major cloud providers like Amazon Web Services and

Microsoft Azure offer cost management tools that provide visibility into cloud

spending, budgeting, and resources usage. These tools, such as AWS Cost Explorer and

Azure Cost Management + Billing help companies track, analyze, and optimize their

cloud costs. Third-party cloud cost management tools are also available. These might

be useful for hybrid cloud environments to get a more holistic picture of total costs and

resource usage

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