Find the Right KPIs to Measure the Success of Your CCoE

Find the Right KPIs to Measure the Success of Your CCoE

Gene Volfe

Once you reach the stage in your cloud adoption of having multiple teams and production workloads running on the public cloud, a high-functioning Cloud Center of Excellence (CCoE) will be central to the success of your business operations and a key driver of your company’s agility, innovation, and competitiveness. Given the importance of your CCoE to your company’s success, it’s essential to measure its performance and progress efficiently and accurately. The best way to accomplish this is by establishing a set of strategically relevant KPIs (Key Performance Indicators).

Developing Your KPIs

Ideally your KPIs should be in place before you launch your CCoE. If your CCoE has already been implemented, you should work quickly to establish a core set of KPIs and expand from that set over time. Beyond validating the centralization of your cloud governance, strategy, and best practices, your KPIs help validate your company’s cloud transformation with those members of your general and executive staff that may be resistant to the cloud model.

Since your CCoE helps guide multiple areas of your company’s cloud transformation, including migration to the cloud, governance, strategy, performance, cost optimization, risk mitigation, education, etc., your KPIs will not always be quantifiable in terms of cost or as specific units of performance. In some instances, KPIs will have to be measured via feedback from key stakeholders, which means that your metrics will be based on the levels of engagement, collaboration, or participation that stakeholders have experienced. Also consider that you may need KPIs that can be used to compare and contrast on-premises infrastructure with cloud alternatives. A primary goal is to establish KPIs that generate relevant insights to help you continually optimize the performance of your CCoE and which also effectively validate your company’s cloud adoption model.

There is no common set of CCoE KPIs that can serve every company. Determining which CCoE KPIs are relevant for your company will depend on the goals that you’ve established for your CCoE and your ability to meet those goals. Your company’s organizational structure, commitment, and culture will likely impact the selection of your KPIs. The following KPI list represents a starting point from which to consider KPIs for your CCoE. It is not an absolute list—there are likely additional KPIs that you will want to consider.

Cloud Transformation Financial KPIs

Cloud transformation KPIs compare on-premises infrastructure costs versus cloud infrastructure costs, migration success, staffing issues or costs, and the impact of your cloud transformation on customers and revenue.

You should take note that your on-premises infrastructure costs are recognized as a capital expense (CAPEX), while your cloud infrastructure costs are generally recognized as an operational expense (OPEX) with a few notable exceptions, such as R&D workloads. You’ll have to measure or convert your on-premises infrastructure costs as an operational expense for comparisons. Your on-premises costs should be calculated based on total cost of ownership, which includes depreciation, interest on loans, IT staffing, maintenance, power consumption, and cost of floor space.

Finally, ensure that any infrastructure cost comparisons between on-premises infrastructure and cloud infrastructure be made on the basis of the same or similar infrastructure running equivalent workloads.

On-Premises Infrastructure Costs

  • What are the on-premises costs of your servers, networking, and software?
  • What are your on-premises IT staffing costs? (Not all of your IT costs apply.)
  • What are your on-premises costs for energy, floor space, air conditioning, miscellaneous?
  • What is your capital investment for your on-premises infrastructure? What percentage is paid upfront vs monthly?
  • What are your on-premises infrastructure costs as a percentage of your business spend?

Cloud Migration Costs

  • What are your cloud migration management, planning, and execution costs?
  • Did your cloud migration stay within budget, and did it meet planned timelines? You should consider the cost impact whether you meet budget and timelines or if you don’t.
  • What are your application re-hosting or rearchitecting costs to migrate to the cloud?
  • What are your IT staff training costs for new cloud systems and technologies?
  • What are your general staff training costs for new cloud systems and technologies?
  • What are the costs for hiring new staff to support/sustain migration to the cloud?

Cloud Operational Costs

  • What is the net-net monthly bill for each team or major product running your cloud infrastructure?
  • Are your cloud infrastructure costs higher or lower than expected or forecasted? * If your costs are higher than expected, what is driving this result? If your cloud spend is lower, what is the reason?
  • Is your cloud spend higher or lower than your on-premises costs for comparable infrastructure?
  • What have you budgeted for your cloud infrastructure and have you been able to stay within your budget? Is your cloud infrastructure budget realistic or have you over or underestimated actual costs? Are you able to accurately budget cloud spend over time based on per-team or product resource usage forecasts?
  • If your cloud presence has been ongoing, has your cloud spend gone up over time?If your cloud spend has been going up, what is driving this growth, additional migration to the cloud, or business growth
  • What are your cloud operations IT staffing costs, and are they steady or growing? If staff costs are growing, what is driving this growth?
  • Are staffing costs in other business units impacted by your cloud operations? Is the finance team spending more or less time on IT cost analysis?
  • Are you using any third-party services or tools to help manage your cloud operations, and how much are you spending on these items? Are you saving money or adding value with these services and tools and if so, how much value or savings?
  • What are your cost savings on energy, floor space, air conditioning, miscellaneous?
  • What are your training costs, enablement requirements and on-going manual tasks to implement new technologies in support of your cloud operations?
  • Can you identify any potential waste in your cloud operations that require minimal engineering effort to address?

Cloud Operations Impact on Revenue and Profit

  • Are your cloud operations helping your company save money and drive more value from committed dollars?
  • Have your cloud operations helped you bring new customers?
  • Are your cloud operations helping to bring in more revenue?
  • Have your cloud operations increased your profits?
  • Has the change to an OPEX model improved cash flow?

Cloud Transformation Business Value KPIs

Cloud Operations Governance

  • Do you have full visibility into your cloud infrastructure inventory on a per team, product or project basis?
  • Can your InfoSec team clearly understand architecture and ownership of cloud resources??
  • Does your cloud infrastructure meet your compliance objectives in a cost effective manner?
  • Can you push financial responsibility down by utilizing chargeback or show back systems?
  • Are you making maximum use of your cloud infrastructure, or do you have resources that can be identified as underutilized?
  • Are you able to accurately report your cloud infrastructure costs, net of all attributed discounts?
  • Are you able to consolidate your cloud infrastructure accounts into single payer accounts to maximize discounts and purchasing power?

Cloud Operations Performance and Automation

  • Has your cloud transformation been efficient? Are you meeting your cloud transformation forecasts?
  • Have you established cloud resource utilization goals, and are you meeting these goals?
  • Is your cloud infrastructure more effective? Have you experienced any service interruptions, and if so for how long? How does any downtime compare to your on-premises downtime?
  • Are your cloud projects on schedule? What are the reasons for any delays?
  • Is the cost-performance of your applications in line with your expectations? Are you able to roll out improvements or updates in an efficient manner?
  • Are you able to develop new services more efficiently? Has your time-to-market improved? Are you able to explore new business opportunities more efficiently?
  • Are you using automation processes or tools to get more out of your CCoE without having to increase team size as the company scales?

Cloud Transformation Education

  • Have you defined best practices for your cloud operations?
  • Have you introduced cloud best practices outreach and training?
  • Have you created a cloud best practices knowledge base?
  • Have you organized and executed cloud training events?
  • Has your staff’s cloud awareness and knowledge increased, and can you measure this?
  • Have you established a mechanism to receive feedback on your cloud operations?


Since your CCoE is central to the success of your cloud operations, it’s important to establish relevant KPIs before you launch your CCoE program. You should also take steps to ensure that you measure your KPIs correctly and that the performance data that you collect is accurate. Ultimately, a good set of KPIs should generate relevant insights that will help ensure that the performance of your CCoE is continuously optimized, while also helping to validate your company’s cloud transformation.

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