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Tracking the ROI on cloud computing is not a one-time activity

 Some time back, I had outlined the steps that CFOs should take in order to effectively compute the cost of cloud computing for their enterprise at any point in time. The thoughts I shared in this post came to mind when I read a post by Chris Harding, Forum Director for SOA and Semantic Interoperability at The Open Group. In his guest post titled Counting the cost of cloud on Dana Gardner's BriefingsDirect blog, Chris characterizes a typical conversation that would have happened in the traditional environments when demand exceeds capacity and contrasts it with a similar conversation in the cloud computing environment today. I like Dana's summary that hits the point home - IT costs were always a worry, but only an occasional one. Cloud computing has changed that. We need to track the cost of cloud and the returns realized on a continuous basis in order to be effective cloud consumers realizing business value for our shareholders.        

 

The points made by Chris and Dana reinforce a couple of the tips that I recommend for CFOs in my earlier post:

  • Extend cost structure to cloud computing
  • Agile cost computation models

This is even more so when the solutions are deployed across multiple cloud deployment models within the enterprise.

 

Having the appropriate measurement mechanisms to track the consumption patterns and the associated returns is absolutely vital for enterprises today. If you are wondering why, just take a look at the manner in which shareholders are driving the IT conversation today.

 

Chris references an Open Group "State of the Industry" cloud survey last year where only 35% of the respondents had measuring mechanisms in place for tracking the return from cloud computing usage. He says that The Open Group is planning on repeating this survey this year. I look forward to the results.

 

But, in the meantime, let me do a little survey of my own. How is your enterprise doing? Are you in the 35% who said last year that they have a measuring mechanism in place? If so, congratulations! You are better positioned than others to meet your shareholders' expectations!

 

Additional resources:

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Comments
Denise Lima | ‎08-06-2012 04:33 PM

SLOWER ADOPTION OF CLOUD - GETTING THE CIO AND CFO ALIGNED

One of the comments from the Saugatuck research you included, rightfully mentions the relationship between the CIO and CFO as an important focus area when determining the cost for CLOUD.  It not only is the relationship but the new financial acumen the CIO must learn in order to deal with the CFO's questions.  This is a hot topic especially for CFOs looking to support private or hybrid cloud solutions. Understand cloud financials and the value to your CFO discusses this topic in further detail and is supported by a survey conducted by CFO.com.

 

 

Denise Lima

 

Nadhan | ‎08-06-2012 08:44 PM

Good point, Denise.  Takes me back to the points I made when offering the Top 5 tips to CFOs for computing the cost of cloud as well as posing the question on whether CIOs are ready to answer the ROI question on Cloud Computing?

 

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