There is a lot of buzz around cloud computing these days. There are real benefits for organizations in embracing cloud technologies. Cloud is the engine that is enabling the organizations to handle big data generated by different devices and social channels. This collected data needs computing power to do analytics. The results from these analytics, if provided in a timely manner, can supply valuable information to the business to make real time decisions. This gives businesses the edge they need to quickly respond to the changing needs of their markets and stay competitive in their industries.
All this is very promising but the question most of the CIOs have is how they show value by adapting the cloud strategy for their organizations. No two organizations are alike; each organization has a different business strategy that determines the IT budget allocation. To build the case for the cloud adaption, the IT organization has to show value in a quantifiable way. There are three main variables: time, personnel (labor cost), and IT assets that can be used to put a financial framework around cloud strategy to show value in monetary terms.
Notable highlights of these variables are:
- Cloud services help reduce Enterprise Applications deployment time thus reduce the cost of deployment.
- Cloud provides Enterprise Systems Unification. It centralizes the collective intelligence and provides the enhanced visibility to the Enterprise Systems. This in turn helps make better and faster decisions to streamline resources that save money.
- Cloud improves productivity. Organizations are offloading non-travail tasks to their cloud providers. They are freeing up their IT resources to concentrate on business issues that drive revenue. E.g. Using Identity Management Services, organizations are automatically provisioning and de-provisioning users.
- Cloud can provide compliance. It can reduce the hours needed to generate reports for regulatory agency auditors. Through real time correlation, most of the work for identifying, capturing, encrypting and storing (or destroying) certain pieces of information and providing proof of your best practices become easier and in-line with internal and external polices.
2) Capital Expense
- There are no capital expense costs for hardware, software and facility including electricity and cooling expenses.
- Pay-as you go is scalable (including elastic provisioning). It creates flexibility for increased margining and cost controls.
- Higher Availability, Better Security, Backup and Recovery, 7/24/365 (real time) – Monitoring with SLA managed contracts is cheaper than hiring experts in-house.
3) Personnel (labor cost)
- No additional head counts for expertise is needed (cost savings in salary, benefits, overhead churn/hiring cost); no additional man hours are needed to provide expert vigilance to catch and analyze, remediate software, hardware, and infrastructure issues. All these tasks can be done by the Service Providers with SLA agreements.