Azure Governance Starter – Part 2: Implementing Strategy, Plan & Ready in Practice

From Cloud Vision to Operational Platform Structure

The introduction of governance in a cloud environment does not begin with tools, but with strategic decisions. This insight forms the core of the Strategy and Plan phases in the Microsoft Cloud Adoption Framework (CAF).

While many organizations seek to enter cloud adoption through a quick technical proof of concept or rapid migration, a structured strategy and planning process provides the foundation for sustainable scalability, security, and operational excellence.

In Part 1 of this blog series, we showed why governance is not a control instrument but a central organizational principle for cloud operations. Now, we will go deeper and show how cloud governance can be prepared, structured, and planned in concrete terms.

Understanding the Strategy, Plan, and Ready Phases

Before diving into implementation tips, it’s worth looking at the first steps in the CAF:

• Strategy: Define objectives, mission, business cases, and risks.
• Plan: Derive an operational plan, organizational structure, and architectural guidelines.
• Ready: Implement the technical platform foundations.

These phases build on each other — gaps in these early stages often lead to rework or inefficient workarounds later.

The light blue boxes represent the starting point or overarching goal of each phase. The subsequent gray boxes represent the focus areas of each phase. Purple boxes finally represent the artifacts produced in each phase. These artifacts form the basis for the next steps and workstreams.

This graphic intentionally focuses only on the first steps, as later blog posts will cover the subsequent Adopt, Govern, Secure, and Manage phases.

Strategy: Internal Preparation Within Your Organization

Identifying the Motivation for Adopting Cloud Solutions

The cloud journey ideally begins with an internal identification, classification, and evaluation of the reasons for introducing cloud solutions.

The purpose of this phase is to define clear motivations that combine both technological and business perspectives. These motivations serve as the strategic anchor point for all subsequent decisions and actions in the cloud adoption journey.

These drivers are critical for aligning with strategic business objectives, maximizing return on investment (ROI), and enabling fact-based decision-making.

Below is a table adapted from Microsoft that lists common motivations for adopting cloud solutions such as Azure:

Defining the Cloud Mission

Once motivations are clear, the next step is to define a cloud mission that blends technological and business perspectives. This mission describes the intended benefits of the cloud for the organization — whether accelerating innovation, enhancing scalability, reducing costs, or ensuring regulatory compliance.

From this mission, concrete, measurable goals are derived, serving as reference points for all subsequent phases. These may include KPIs for time-to-market, cost optimization, or industry-specific compliance.

Microsoft offers various free CAF assessments in questionnaire format to objectively measure maturity levels and identify gaps in strategy, processes, and skills.

Identifying Business Cases

Based on the defined mission, specific business cases should be developed to justify the use of cloud providers.

A complete business case should include:

• Benefits analysis (savings, efficiency, innovation potential, time-to-market)
• Cost model (cloud operating costs, migration, training)
• Risk analysis (technical debt, regulatory uncertainty, organizational blockers)
• Alternative scenarios (e.g., hybrid implementation)

Assessing Existing Risks and SLAs

In this step, risks are systematically documented and assigned mitigation measures:

• Technical risks: Legacy systems, missing integrations, dependencies on on-premises systems
• Operational risks: Staff capacity, missing processes, incident response times
• Regulatory risks: GDPR, industry standards (e.g., ISO 27001, HIPAA)
• Contract/SLA risks: Unclear availability or support terms

Identifying the Existing System and Application Landscape

In parallel with the economic evaluation, a high-level target architecture is drafted. This architecture describes expected workloads, desired deployment models (IaaS, PaaS, SaaS), geographical data distribution, identity strategies (Entra ID, hybrid), as well as integration points with existing systems. The aim is not to create a detailed technical architecture, but rather a strategic target vision that is understood and supported by all relevant stakeholders.

Before detailed technical designs are created, a strategic architecture blueprint should therefore be available:

• Workloads (critical applications, data platforms, integrations)
• Deployment models (IaaS, PaaS, SaaS)
• Region & data location (compliance, latency, cost)
• Identity strategy (Entra ID, hybrid integration, Conditional Access)
• Integration points (on-premises, partners, SaaS services)

Identifying Internal Stakeholders

A central part of the Strategy phase is the creation of a stakeholder map. Governance extends far beyond IT and includes security officers, compliance teams, finance, works councils, business units, and external partners. The expectations, responsibilities, and areas of influence of these groups must be clearly documented and incorporated into an appropriate communication strategy.

Typical stakeholders include:

• C-level / executive management
• IT leadership & architecture
• Security & compliance
• Finance / controlling (FinOps)
• Works council / HR
• Business units with high cloud demands
• External partners / service providers

Methods for creating a stakeholder map:

• RACI matrix (Responsible, Accountable, Consulted, Informed)
• Power-Interest grid (to prioritize stakeholder communication)

Formation of a Strategy Team or Cloud Center of Excellence

Finally, during the Strategy phase, an interdisciplinary strategy team is established, often serving as the precursor to a Cloud Center of Excellence (CCoE). This team is responsible for the conceptual governance of cloud adoption. It also assesses acceptance for using cloud providers and, where necessary, establishes concrete change management processes.

Thoughtful Assessment of Cloud Readiness and Organizational Preparedness

In addition to technical readiness, organizational maturity must also be assessed:

• Are cloud operating models already in place?
• Are roles & responsibilities defined?
• Are change management processes established?

Microsoft’s Organizational Readiness Assessments in the CAF are useful here, as they identify weaknesses in processes, skills, and structures.

Below are several guided Microsoft resources that can support you during your cloud journey:

• Azure Well-Architected Framework Maturity Model Assessment
• Cloud Adoption Strategy Evaluation
• Development Speed Assessment
• Cloud Journey Tracker
• Cloud Governance Assessment
• DevOps Functionality Assessment
• FinOps Review
• Azure Landing Zone Review
• Mission-Critical Workload Evaluation
• Technical Assessment for Platform Engineering

As the final deliverable of the Strategy phase, it is recommended to create a concise Cloud Strategy Paper that documents the mission, goals, risks, target architecture, and principles. This paper serves as the reference framework for all subsequent phases — in particular the upcoming Planning phase.

Plan: Selecting the Appropriate Cloud Provider

The Plan phase in the Cloud Adoption Framework has the task of translating strategic considerations into tangible, technically implementable, and organizationally anchored plans. It is not just about technical decisions, but also about defining a scalable operating model that can sustainably support governance, security, and cost-effectiveness.

Defining Non-Negotiables and Must-Haves

At the start comes the deliberate definition of non-negotiable conditions. These “Non-Negotiables” act as guardrails that shape every architectural and process decision. They include binding compliance and security requirements such as GDPR compliance or industry-specific standards, minimum operational requirements such as clearly defined SLA objectives or disaster recovery strategies, as well as architectural principles that must never be violated. Restrictions on the selection of Azure regions, for example due to data residency or latency requirements, also belong in this category.

In practice, these points are first prioritized qualitatively, for example using the MoSCoW method, and then technically enforced, for example through Azure Policy definitions. These policies are bound to Management Groups so that new subscriptions are automatically deployed in a compliant way.

Categorizing the Lifecycle of Each System and Application

A complete overview of the existing system and application landscape is a prerequisite for realistic planning. In the Plan phase, each system and application is classified according to its lifecycle status. This categorization clarifies which systems are critical for ongoing operations, which should be modernized in the medium term, and which are approaching retirement.

Organizations often use models such as TIME (Tolerate, Invest, Migrate, Eliminate) or simple Run/Grow/Transform classifications. This step is supported by tools such as Azure Migrate for automated inventory and dependency analysis, and Azure Resource Graph to inventory environments across all subscriptions.

Determining the Individual Migration Strategy for Each System and Application

Building on the categorization, a migration strategy is defined for each system. The CAF recommends the spectrum from Rehost through Refactor and Rearchitect to Rebuild and Replace. This decision depends not only on technical maturity, but also on business priorities, cost/benefit considerations, and regulatory risks.

In many cases, it is advisable to start with simple Rehost or Replatform scenarios to quickly bring initial workloads into Azure and gain operational experience, while more complex modernization efforts are intentionally placed into later migration waves. Microsoft provides practical decision guides and assessments to derive the appropriate strategy for each application based on data.

Defining the Personnel Operating Models

A key outcome of the Plan phase is the definition of the Cloud Operating Model. This describes how roles and responsibilities are distributed between platform teams, product teams, and possibly external partners. Organizations must decide whether to adopt a centralized model, a decentralized model, or a hybrid shared-operations approach.

The latter has proven effective in many organizations: a central Cloud Center of Excellence (CCoE) operates and develops governance, identity, network, and security services, while workload teams work autonomously within defined guardrails. In agile environments, a “You build it, you run it” approach can also be useful, with development teams owning the full lifecycle of their workloads.

Visualizing and Communicating Responsibilities

To ensure that responsibilities exist in practice and not just on paper, they are clearly visualized and communicated during the Plan phase. A RACI model that assigns each task to a role provides transparency. This is aligned with the Azure Shared Responsibility Model to make clear which responsibilities Microsoft, as the cloud provider, assumes and which remain with the customer. It is important to distinguish between technical enforcement (e.g., via Azure Policy or Management Groups) and organizational accountability (e.g., approval, oversight, escalation).

Such models should not only appear in governance documentation but also in onboarding materials so that they are actively practiced.

Planning the Representation of the Organizational Structure in Cloud Environments

The structure of the cloud environment must logically reflect the organization. In the Plan phase, a subscription and management group strategy is therefore developed. Best practices recommend a clear hierarchy from the root management group through organizational and functional levels down to environments such as production or test.

Each level receives appropriate policies, naming conventions, and RBAC assignments. Azure Policy sets ensure consistent compliance, tagging strategies enable clean cost allocation and automation, and clear naming standards improve resource discoverability. Regulatory requirements, such as the segregation of EU and non-EU data, should already be built into this structure.

Defining Architectural Design Principles and Goals

In addition to the organizational structure, binding design principles are established during the Plan phase to serve as technical guardrails for the subsequent Ready phase. These include decisions on network design (e.g., Hub-and-Spoke or Virtual WAN), identity management with Entra ID, region selection based on latency and compliance, scaling and resilience strategies, and reusability and automation. The aim is for all teams to build on the same principles, ensuring that new workloads are “compliant by default.”

Creating a Cloud Roadmap Including Migration Waves, Dependencies, Responsibilities, and Budget Cycles

The cloud roadmap is the operational centerpiece of the Plan phase. It defines in which waves workloads will be migrated, which dependencies must be taken into account, which teams are responsible at which times, and how budgets and licenses are allocated over time.

Each wave has milestones and acceptance criteria, and after completion, a retrospective is conducted to adjust the roadmap to new insights. This ensures that the plan remains current, even if priorities change.

Ready: Technical and Provider-Specific Preparation

The Ready phase in the Microsoft Cloud Adoption Framework (CAF) translates strategic decisions into a production-ready cloud platform. The goal is to implement all necessary technical, organizational, and security measures to create a stable foundation for migrations and innovation.

In Azure, this primarily corresponds to the deployment of Landing Zones, which ensure governance, security, and operational continuity from day one.

Selecting Provider-Specific Solutions, Services, and Tools

In this step, the architectural principles defined in the Plan phase are translated into concrete Azure services. The aim is to choose the right building blocks for identity, networking, security, operations, and automation from the wide range of offerings.

Examples include:

• Identity: Microsoft Entra ID as the central identity authority, optionally with hybrid Active Directory integration
• Networking: Hub-and-Spoke topology or Virtual WAN, central Azure Firewall, Private Endpoints for PaaS services
• Security: Microsoft Defender for Cloud, Azure Policy, Key Vault for secrets
• Provisioning: Infrastructure-as-Code with Bicep or Terraform
• Cost & Operations Management: Azure Cost Management + FinOps tagging, Azure Monitor

It is critical that these services are not considered in isolation but embedded in a consistent platform design that allows for future scaling and reuse.

Implementing the Organizational Structure in Cloud Environments

The technical representation of the organizational structure is achieved through a management group hierarchy and a well-thought-out subscription strategy.

A proven structure looks as follows:

• Root Management Group – global governance, policies, and RBAC roles
• Platform Level – central services, security, and network infrastructure
• Business Units / Functions – organized by business area or product line
• Environments – separation into production, test, and development

Based on this structure, Azure Policies for global standards are applied, naming conventions enforced, and budget ownership assigned. It is essential that all structures are implemented as code to ensure consistency and recoverability.

Defining Identity and Access Management Policies

Identity and access management in the Ready phase strictly follows the Zero Trust principle:

• Least privilege access rights
• Conditional Access for MFA, device compliance, and location restrictions
• Temporary assignment of privileged roles via Privileged Identity Management (PIM)
• Use of Managed Identities for applications and automation
• Storing secrets and certificates exclusively in Azure Key Vault with automated rotation

The enforcement of these policies is regularly reviewed through Azure Policy, Access Reviews, and automated audit processes via Privileged Identity Management.

Implementing the Network Topology

The network design developed in the Plan phase is now technically implemented. In practice, this means:

• Building a Hub-and-Spoke model or Virtual WAN with centralized security and routing
• Integrating on-premises networks via ExpressRoute or VPN
• Using Private Endpoints for PaaS services to minimize public exposure
• Strict NSG and ASG configurations following a whitelist principle
• Implementing a Private DNS strategy for internal name resolution

Implementing Technical Security Measures

The technical security architecture is fully implemented in this phase, including:

• Enforcing compliance requirements through Azure Policy and policy initiatives
• Enabling Defender for Cloud for security posture management and threat protection
• Default encryption of data at rest and in transit
• Integration of a central Key Vault for all secrets and keys
• Optionally, multi-cloud security monitoring with tools like Prisma Cloud

Implementing a Centralized Monitoring Process

A functional monitoring setup is essential for stability and fast issue resolution. In Azure, this is typically achieved with:

• Azure Monitor for metrics and performance
• Log Analytics as the central logging backend
• Application Insights for application and user telemetry
• Alert routing via Action Groups to responsible teams
• Automated responses using Azure Automation or Logic Apps

Defining Strategies for Business Continuity and Disaster Recovery

The BC/DR strategy ensures that critical systems remain operational or can be quickly restored in the event of a disaster. Best practices include:

• Geo-redundant storage (GRS, ZRS)
• Using Azure Site Recovery for VM and application failover
• Regular, documented recovery testing
• Backups with defined retention periods and compliance adherence

The Ready phase concludes with a formal platform validation. Microsoft provides assessments such as the Cloud Journey Tracker, which evaluate governance policies, security configurations, BC/DR capabilities, and monitoring setups. Only when all evaluation criteria are met is the environment considered production-ready and prepared for the subsequent phases: Adopt, Govern, Secure, and Manage.

Conclusion

The Strategy, Plan, and Ready phases form the methodological foundation of any successful cloud governance initiative. They are far more than formal preparation — they establish the architectural, organizational, and security guardrails that guide all subsequent activities. Those who approach these phases with care reduce the risk of costly mistakes, create a shared understanding between business and IT, and ensure that cloud adoption remains scalable, secure, and efficient in the long term.

It becomes clear that successful cloud adoption is not about migrating workloads as quickly as possible, but about deliberately creating the foundations upon which automation, compliance, and innovation speed can later be built. The artifacts produced during these phases — from the mission and business cases to the management group structure and technical platform standards — serve as the “Single Point of Truth” for all future decisions.

The Ready phase acts as the bridge between concept and reality. Here, the strategic decisions from Strategy and Plan are transformed into a production-ready platform with clearly defined identity policies, an implemented network topology, technical security mechanisms, centralized monitoring, and well-designed business continuity and disaster recovery strategies. Only when these elements have been implemented and validated is the environment truly cloud-ready.

In the next part of this series, we will dive into the phases that address actual operational management and continuous optimization. We will look at the sections of the Microsoft Cloud Adoption Framework that build on Ready:

• Adopt: Migration of existing workloads and modernization of applications, including practical migration patterns (Rehost, Refactor, Rearchitect, Rebuild, Replace).
• Govern: Establishment of a robust governance framework with policy design, cost control (FinOps), regulatory compliance, and security-by-design.
• Secure: Implementation of an end-to-end security architecture, zero-trust approaches, threat detection, incident response, and security operations.
• Manage: Establishment of operational processes, monitoring, proactive maintenance, SLAs, and continuous optimization aligned with the Well-Architected Framework.

Through concrete examples and reference architectures, we will show how the structures prepared in Ready lay the foundation for these phases. We will also integrate Microsoft tools and assessments that support continuous maturity improvement.

With this holistic approach, you will be able not only to adopt a cloud platform but to strategically manage it, operate it securely, and continuously develop it throughout its entire lifecycle.