Organizational Change Considerations When Moving to the Cloud

Dr. Shannan Simms
By: Dr. Shannan Simms
Date: April 27, 2020

“Cloud is not the future – it’s now. It’s an enabling force for business evolution that goes beyond technology, allowing organizations to more efficiently and effectively reengineer the company’s corporate strategy.” -Goodburn & Hill

New Ripples Across the Organization

Any change within an organization introduces ripples of decisions and considerations. This is true if you are changing a simple process or introducing an organizational realignment. The sheer act of change requires decision-makers to take a step back and consider the impacts. Moving to a cloud technology is no different.

Many organizations are overwhelmed with back office manual processes or current customized technology systems that require significant IT support. Cloud solutions empower organizations to simplify customized systems and reduce business unit reliance on IT. This also frees up IT to support more strategic goals. The value proposition to move to a cloud platform is that it is easier, quicker, more cost effective, and more straightforward when compared to on-premise, customized solution deployment or upgrade.

Organizations are Systems

Moving to the cloud changes an organization’s operations, structure, and necessary workforce skills. However, many organizations approach cloud transitions similar to a traditional upgrade and are unprepared for cloud-specific considerations. Organizations that plan to implement these best practices for preparing these changes often see more project success and user acceptance.

To help categorize these change practices, we leverage an organization design framework to simplify the considerations you will need to address. Every organization is a system. A system is simply a set of “things” that work together toward a common goal. “Leavitt’s Diamond” (Figure 1) illustrates four integrated components. When you make a change in one component there are impacts on the other three components. These four components include:

  • Technology: The tools people use to do the work of your business
  • Structure: The way organizations establish decision rights, power, authority, and responsibility to make and convey decisions and direction of the work
  • Task: Processes, workflow, and resource allocation define how work is completed
  • People: The human capital management practices to attract, recruit, select, train, and develop talent to do the work

If you change your technology, then you will also need to change structure, task, and people.

Considerations when Moving to the Cloud

Many organizations are excited to start their cloud projects and often say, “I wish I’d known that before I started.” The following chart categorizes our observations on key considerations, aligned to Leavitt’s Diamond, to help you in your planning to move to the cloud.

Importance of Managing the Organizational Change

According to Prosci®, a global change management research firm, projects are six times more likely to be successful if you use a structured approach to manage the change. Three important best practices to consider as you design your approach include:

  1. Assess your organization’s culture; the impacted areas; and the size, scope, and scale of the change before the project team kicks off the implementation. This will allow you to plan and put a strategy in place to communicate the changes both across the organization and to individuals.
  2. Engage the business as part of your solution design. This will help build buy-in and advocacy from within the business.
  3. Communicate deliberately and transparently about the impact of the move to cloud on role changes, organizational structure shifts, and skills and performance expectations. This will help to alleviate natural organizational anxiety and fear associated with large-scale transformation efforts.

The goal of your cloud project is end user adoption of the new system. Executing a tailored, deliberate organizational change management plan will help minimize the natural disruption of change.

Reference: Goodburn, M, & Hill, S. (2010). The cloud transforms business. Financial Executive, 35-39.

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