Wednesday, December 18, 2013

Cloud Computing Perspectives 1: The Business Owner

Cloud Computing Perspectives 1: The Business Owner
By James N Burns

The Challenge for the Business Owner

Leaving aside the technology for the moment then, let's take a look at some of the key challenges that a business owner might face.

1. Costs: Businesses, their owners and financial controllers want to reduce costs to improve profitability and run more efficient operations. Understandably, interest in this area is keen because of the recent tough trading conditions.

2. Accountability: In order to manage a business effectively and steer it in the right direction, a business owner needs to know who is using what, how much it costs, and whether it delivers a return on investment.

3. Business agility: In order to stay ahead of the competition and remain "master of its own destiny", a business needs to have fleet-of-foot in order to react quickly to new opportunities and market directions.

If we were to ask a business owner to summarise their perspective on this, we might expect to hear the following - does it sound familiar to your situation?

"Our IT is expensive and sluggish. I'm frustrated because it's holding us back from moving quickly with new ideas, and we're losing our competitive advantage."

The Solution
What is it about cloud that helps a business owner to overcome the challenges that we've raised above.

1. First, let's look at how cloud can help to reduce costs and improve efficiency:

  • Capital investment is reduced: with cloud, more IT is outsourced or rented on demand. This means that the need to purchase hardware (servers and all the supporting infrastructure) is reduced, resulting in a lowering of the amount of capital investment required to drive the business.

  • On a related note, capital wastage is reduced, because with cloud, you only need to pay for what you use. This is important because cloud makes it possible to more closely align IT spend with actual requirements at any one point in time - a very efficient way of procuring IT resources.

  • Improved IT automation and a smaller IT footprint allows your IT teams to do more with less. Headcount can be redeployed so that instead of spending time on repetitive tasks ("keeping the lights on") your IT department can work on more strategic work that is of greater value to your business.

2. Next, how does cloud help a business to capture IT accountability?

  • The centralised "worldview" of cloud allows you to see how much IT resource is being used by a particular project or business unit so you can get a better idea of ROI. With this information to hand, it is easier to establish which initiatives are making money, and which are draining resources.

  • A knock-on effect from this visibility is the improved planning that it encourages: now they can see the real cost to the business of the IT they consume, business departments are more conscientious in their consumption of resources.

3. Finally, cloud delivers what is often regarded as its ultimate advantage - business agility:

  • IT on demand: teams get the resources they need, when they need them, speeding up development and mitigating delays, and in doing so, shortening project delivery times.

  • Accelerated decision making: new or pilot projects no longer require capital expenditure to get off the ground and can be approved more quickly, while risk is reduced on more speculative initiatives, opening up the door to innovation and potentially the next route to success.

  • Improved delivery and economics of IT: gives your business the adaptability and fleet-of-foot to gain competitive advantage.

Next time, we'll look at cloud from the perspective of the IT department, but for now, let's give the final word to our business owner:

"We've realised that cloud is far more than just a cost-cutting exercise. Our cloud strategy has transformed our IT from something that was holding us back, to something that enables our organisation to reach its true potential."

Questions about cloud computing?

You're welcome to contact us, or you might like to take a look at the "Cloud Answers" section of our website:

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