April 25, 2012
Cloud computing is one of the hottest buzz words in business today. Yet it seems when it comes to cloud computing, many businesses talk about it but no one really does anything about it.
In an excellent guest article for Forbes Magazine, Irv Rothman discusses the need for a united front on a company’s executive team to maximize the immediate and long-term cost savings performance made possible by today’s cloud computing software.
“A successful journey to the cloud requires intense planning and alignment across all parts of the business; essentially a roadmap that helps navigate the financial and technology decisions that need to be made over the years ahead. The payoff will be worth it, but to get there, organizations need an internal champion. That champion has traditionally been the CIO. However, cloud affects so many parts of the business that a successful strategy requires the buy-in and close support of the CFO as well. Though some may see this as an unlikely pairing, the close alignment of IT and finance means that CIOs and CFOs are finding themselves in a significantly more interdependent relationship.”
You can think of today’s cloud computing as an evolutionary leap from the revolutionary moment the internet first arrived.
Businesses in the 90s-2000 relied on processor/hardware gains roughly in line with Moore’s Law coupled with enhanced flexibility via in-house wired connectivity between machines. The internet was just starting to come online and upload/download speeds made the thought of attaching documents or PDFs files a “wait until the next day” proposition.
Today’s 2000-2010 technology has flip-flopped this dynamic.
Technology has improved to the point where smaller devices such as tablets like the iPad now pack greater processing power than yesterday’s PCs, and are connected wirelessly to networks that can now upload/download HD files in a matter of minutes (or seconds via Intel’s Light Peak or Apple’s Thunderbolt). Today’s era of technology allows you to run powerful applications fully capable of running all aspects of your business from an iPad via an internet connection with no need for costly off-the-shelf software, servers, and hardware upgrades.
Most corporate CIOs have known about this paradigm shift for quite some time, but CFOs in the same company might not be as enlightened how this transition can equal dramatic cost-savings benefits.
Rothman keenly lists the top 5 reasons CIOs and CFOs should see eye-to-eye in cloud software implementation:
#1: CIOs can help CFOs understand the business case for cloud
“Cloud isn’t an IT priority, it’s a business priority. Since it is rooted in technology, it is up to the CIO to make this case to other members of the C-suite, including the CFO. The CIO can speak directly to business priorities dear to the CFO by demonstrating how cloud technologies help improve business processes and the overall performance of the enterprise.
The CIO can also show how employing technologies delivered as a service (via the cloud) helps the company save money by allowing an external vendor to shoulder the burden of maintenance and hosting. With a technical understanding of the data and infrastructure requirements needed, the CIO can also help the CFO understand the associated risks associated with cloud and how they will be able to address likely CFO concerns such as data governance and compliance. Together the CIO and CFO can both raise their profile with the CEO and executive board by presenting a united front, and offering their shared insights on the business benefits of cloud.”
#2: CIOs and CFOs must collaborate on a deployment plan
“Whether addressing an existing problem or offering new capabilities, cloud technologies can be disruptive. The CIO and CFO can minimize the disruption by working together on a deployment plan that reduces downtime while new systems are brought online, rapidly trains employees using the new technology, and establishes specific metrics for success. The conversation should start with reviewing and prioritizing the needs of the business, followed by a side-by-side comparison of available cloud technologies that address those needs. The CIO can offer a critical look at the gaps in the company’s existing technology landscape, coupled with a thoroughly researched recommendation of emerging technologies that can fill these holes.”
#3: CFOs must have CIO insight to fully grasp the financial implications of adopting cloud technologies
“The implementation of cloud technologies will cause a substantial shift in expenses and cost structures. The CFO will need the CIO’s insight to accurately anticipate these changes. It’s not just about long-term cost savings that come with cloud technologies. CFOs also need a clear understanding of initial costs, as well as the potential impact it may have to business efficiency and income while these technologies are introduced. The CIO will have clear insight into service level agreements (SLA) and respective costs associated with a cloud vendor, the cloud solutions they offer, and what will be needed to migrate legacy systems and train employees on the new technology. Because the CIO will be closely monitoring the company’s evolution to cloud, they will be in a position to advise the CFO on expected shifts in costs and cash flow. This will be critical for the CFO who needs to provide Wall Street with accurate forecasts on the company’s Capital and Operating expenses on a quarterly basis.”
#4: Any company can implement cloud; the difference lies in how these technologies are managed
“Once the CFO decides to fund the implementation of cloud technologies, someone has to create strategies to manage and maintain these technologies. This responsibility falls under the purview of the CIO. However, the CFO must work with the CIO to create management strategies that extract the most business value and protects the organization. The competitive advantage will come with how an organization manages change, integrates its service portfolio and leverages the information generated to better serve stakeholders.”
#5: The CIO and the CFO must present a united front to reign in “shadow IT”
“Business users are becoming more sophisticated in technology use, and cloud applications are relatively simple to install, even for moderately savvy users. Without proper oversight, splinter groups will find ways around corporate IT to take immediate advantage of cloud technologies. To help counteract this “shadow IT” activity, the CIO and CFO must work together to be proactive about embracing new technologies such as cloud, before department heads and others engage in rogue activities. With innovative technologies such as cloud, it becomes more imperative that all groups align across the business. Collaboration from the top down sets a clear example and best protects corporate interests.”
It is ironic in some ways cloud computing is meant to improve collaboration across all departments in business, yet many companies stumble at the very implementation of it.
Without fully realizing the benefits, many businesses handcuff themselves into slow-motion gains as opposed to an instant return on investment maximized the full benefits of cloud computing.
This makes it more important for businesses to align themselves with a cloud business software provider who can guide them on the implementation process with a full strategic deployment plan. Truly successful cloud software companies have been doing this now for a while.
AnaTango has taken this concept one very large step further.
We have developed Anavation and Anavoy AMI-based software to adapt to each business it serves, to the point that no two versions of the software are alike. When the corporate team, SDP implementation and the very software itself can align themselves into complete business efficiency, the true power of what cloud computing can be is fully realized.
Even CFOs to CIOs can appreciate how this scenario makes more than cents from day one.
Forbes Magazine “CIO, Meet the CFO: 5 Ways To Get More From Your Cloud” by Irv Rothman
AnaTango’s Chief Marketing Officer Rob Mayeda brings nearly 17 years of broadcast news/media experience to AnaTango and is a multiple Emmy-winning meteorologist and multimedia producer. Rob is a self-described technology ‘geek’ constantly researching and testing new software and hardware designs. On other days, his Cavalier King Charles Spaniels rule his life and take him for walks. Contact Rob @ firstname.lastname@example.org