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Applying the Pareto Principle to your Cloud Strategy

Cloud computing has its roots in the idea of “utility computing” from the 1960’s, and has evolved over the past decade into a flexible and scalable solution for many organization’s computing needs. As this evolution continues, and the cloud options and combinations expand, many managers and organizations are becoming increasingly perplexed about where to start with their own approach to cloud adoption. 

To begin, we can look to the Pareto Principle (also known as the 80/20 rule) to focus our efforts.

Not many people are aware that the principle was named after Vilfredo Pareto who, as the story goes, noticed that 20% of the pea plants in his garden yielded 80% of the healthy pea pods, that 80% of the land in Italy was owned by 20% of the population, and that 80% of economic production typically came from 20% of the companies. Richard Koch writes in his book that, “In business the 80/20 principle is behind any innovation, any extra value. It is an entrepreneurial principle, a formula for value creation utilized not only by entrepreneurs, but by most managers and organizations.”

With a Pareto Principle mindset, let’s step through a few actions that can produce the highest yield for your cloud strategy:

Write it down

“Most of us don’t work out what we want. And most of us end up with lopsided lives as a result.”

  • Richard Koch, author of The 80/20 Principle

Gartner estimates that less than one-third of organizations have a well-documented cloud strategy. “Because the CEO says so” is not a strategy. Business goals must be defined. Donna Scott, research vice president at Gartner, says, “A cloud strategy clearly defines the business outcomes you seek, and how you are going to get there. Having a cloud strategy will enable you to apply its tenets quickly with fewer delays, thus speeding the arrival of your ultimate business outcomes.”

Your cloud strategy keeps the end goals in the conversation as you step through innovation cycles and course correct, and it allows you to align expectations across the enterprise. Misaligned expectations is a major cause for confused results and many project failures.

Not a One-Size-Fits-All Solution

Once you have clear business goals, it’s time to understand what cloud solution will work best for your needs. There is no one-size-fits-all approach, so you must align your goals with the cloud options available which range from “no cloud” to “pure cloud.” 

Gartner recommends a “bimodal” approach whereby you focus on “keeping the business running reliably” on the one hand, and focus more on “agility, speed and innovation” on the other. They also introduced a matrix to help guide which kind of cloud service to consider for each application or use-case scenario you are considering. 


As you can see from the matrix above, applications that have high and clear benefits with low and manageable challenges are prime candidates for the public cloud whereby an application with the same benefits but high or unmanageable challenges may be good candidates for a private cloud approach.

One area that is ripe for cloud computing is analytics. With the sheer amount of disparate data being stored across many different environments and in many different formats, the cloud can be a great solution to extract meaning and develop new–otherwise hidden–insights and opportunities. And, again, a business case should be made when assessing which analytic projects would be best building in, or migrating to, the cloud.

A great example of this practical cloud analytics adoption is EHRs. Sriram Bharadwaj, director of information services at UC Irvine Health explains, “In the past, EHRs were operating just to make sure we collected data from physicians and all of the data is stored in a single repository… Now hospitals are trying to figure out how the data stored in an EHR can be used to make effective decisions around the planning of care, the quality of care, redesigning care and reducing the cost of care."

The Right People, in the Right Places

Cloud solutions will often use the latest and greatest available technology which allows for a faster time-to-market than those using a more traditional infrastructure. But with that cutting edge technology comes the need for talent who have special skill sets. Ensuring you have the talent capacity to implement your cloud strategy can help you to lock in your greatest ROI while reducing unnecessary risks and inefficiencies.

This is not a comprehensive list of things you will need for your cloud strategy, but it should get you off to a good start writing out a clearly defined strategy, understanding what cloud capacities you will need based on business goals, and making sure you have the talent on hand to execute processes that will make use of the cloud fruitful for your organization.

If you would benefit from an advisor helping you with your cloud strategy, finding talent for implementation or both, we can help you turn your challenges into opportunities. Feel free to reach out to us with any questions you may have.


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