Important Considerations Before You Start Producing Cloud KPIs

Date Posted: 10.15.21
Read Time: 10 min

Cloud KPIs are a key performance indicator comparing of one set of metrics against another to measure change. To create accurate cloud KPIs, it is important to understand the relationship between visibility, optimization, and automation.

The increase in cloud usage has produced a commensurate rise in the number of cloud KPIs that companies can use to measure everything from the performance of a business unit, to the ROI of migrating to the cloud, to how well the organization attracts and retains talent. With thousands of cloud KPIs to choose from, companies can adopt  SMART criteria for assessing whether the metric is a key performance indicator:

  • Specific – whatever is being measured must provide a specific purpose.
  • Measurable – the cloud KPI must be measurable in a consistent manner.
  • Achievable – improvement must be achievable.
  • Relevant – the improvement of a cloud KPI must be relevant to organizational objectives.
  • Time-Phased – the values of outcomes represent a predefined and relevant period.

Although each criterium plays an important role in producing meaningful cloud KPIs, “measurable in a consistent manner” is the most impactful. Any inconsistencies in the way metrics are compiled will produce inaccurate KPIs, which in turn affects decision-making. Cloud data accuracy requires three elements: visibility, cost optimization, and cost control automation.

Visibility

Approximately 80% of employees use apps and services in the workplace unsanctioned by their IT departments, which can impact performance.

When compiling metrics for cloud KPIs, you must be able to capture the users, what they are using,  what they are using it for, and how much their use is costing the organization. For example, if you want to determine the cost of customer acquisition or revenue and your marketing department was using resources that were not visible to you, the costs of acquisition and revenue would be remarkably low – something that could influence how much the company invests in future marketing efforts.

Most cloud service providers now offer tools for you to see what resources are being utilized in your cloud (i.e., AWS Cloud Map, Azure Cloud Discovery, etc.), however, these tools do not tell you who is using them or what they are being used for. Therefore, once the resources have been discovered, it is important that an automated tagging policy is enforced to facilitate accurate cost and utilization allocation metrics. Only then can you start to think about producing accurate cloud KPIs.

Cost Optimization

While not all cloud KPIs are financial, it is important to optimize costs before producing your first set of cloud KPIs. If you do so after compiling the first benchmark KPIs, your next comparison will rise dramatically due to vastly reduced costs and increased profit margins. However, you´ll never be able to reproduce that level of improvement. Additionally, if the post-optimization KPIs coincide with a business initiative, it may skew the apparent success of the business initiative.

Cost Control Automation

Once you optimize costs, automating cost controls ensures metrics are measurable in a consistent manner – i.e., every time metrics are compiled, costs are optimized. As there are too many parts to effectively manage manually, automation is the best way to achieve consistency in cloud environments. Additionally, automation mitigates the risk of human error and ensures organizations have reliable data on which to make well-informed business decisions.

Review your operational processes and work to make them more cost-efficient – for example by implementing infrastructure automation to accelerate DevOps processes and eliminate potentially costly errors. As with optimizing costs, a transformational change such as infrastructure automation is best done before producing the first set of benchmark KPIs.

Prepare Your Environment

Producing accurate cloudo KPIs requires the advanced preparation of your environment. If you produce cloud KPIs without visibility, cost optimization, or cost control automation, you will fail to gain an accurate measure of performance. This could impact the financial management of the organization, as well as business operations, security, and compliance.

We invite you to connect with us if you require any assistance with the preparation of your environment, or have questions about compiling metrics for cloud KPIs=. Our team of experienced automation professionals will be happy to share established best practices for maximizing the value of your cloud KPIs.