State of Cloud Computing: Locking in Migration CostWhile migrating to the cloud is ultimately intended to reduce costs and make it easier to run your business, not following the right steps at first can lead to the exact opposite. Ultimately, it is the risk of downtime, security of your data, and objectives of the cloud service vendor in question as your enterprise nurtures this ongoing relationship. A Statement of Work (SOW) should be developed from the start, with a focus on objectives, tasks, and deliverables. The SOW should also cover details on project management in a fixed price model.
A vendor often presents a special deal if an organization like yours signs a contract immediately. Signing a proposal is not the same as signing an SOW, as most proposals simply outline the services to be offered. These also do not break down the cost of services or list acceptable performance criteria. A proposal is just a legally binding contract, which could put your organization at risk if the services do not meet the qualifications for quality and consistency.
Taking the time to draft the SOW helps your organization in many ways. First, make sure that prices are firmly established and obligations are stated as such, not as just vague goals.
- Deliverables. An SOW should incorporate a project plan complete with a schedule for all deliverables and tasks associated with the agreement. Solid deadlines should be labeled outright and dates should be defined from beginning to end. Each detail needs to be written out clearly so that even someone not involved with the project can understand what is being provided. With the deliverables clearly identified, you know exactly what the cost in migrating is getting you.
- Performance. Downtime, speed, security, and other performance measures need to be defined as precise obligations. If the vendor’s performance doesn’t meet up to these expectations, therefore, you can hold them accountable. Otherwise, the vendor can find ways to hold the customer accountable for later issues and come up with excuses to charge additional fees.
- Organization. Define all services clearly when writing the SOW. Using alternate terms could confuse a later reader of the agreement, in effect reducing the vendor’s obligations. It can also help to create a broader SOW to generate a payment structure, for example, If you are re-negotiating a time and materials pay structure to a fixed-fee one. You can then cover individual requirements further in a later statement. Take the time to plan and analyze each aspect of the agreement before writing it, in order to clearly lay out all your expectations of the vendor.
Taking initiative when it comes to the SOW means your organization has more control over the cost of the services. You can also minimize the risk of future disputes. Integrating home-grown language into the SOW also ensures projects have a better chance of staying on track, as the requirements are clearly outlined.
Each SOW should include an overview at the beginning, plus a list of your requirements for the tasks, deliverables, and milestones to be accomplished. By locking in the migration cost, your organization knows exactly what the financial obligations will be, with all aspects of the service covered. The vendor also understands what its obligations are, especially if you are faced with excessive downtime or compromises in data security. The ultimate goal is to minimize the risk while maximizing the efficiency of running your business.
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