The extensive availability of cloud services have increased CIOs’ presence across the enterprise, whether these services are procured at a corporate level in alignment with the overall IT strategy or by individual business units looking to realize their own objectives. Either way, the responsibility of ensuring that there are mechanisms in place to answer the ROI question on cloud computing squarely lies with the CIO – for all such services consumed across the enterprise. Such mechanisms better position CIOs to address questions on cloud ROI likely to be posed by the CFO, CEO or for that matter, shareholders who drive the IT conversation today.
I recently 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 Briefings Direct blog, Harding 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 Gardner’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.
CFOs have a well-defined role to play from a corporate financials perspective as I outline in my post on 5 steps CFOs can take to compute the cost of cloud. However, Harding’s article punctuates the critical need for CIOs to have continuous interaction with the CFOs for effective execution of these steps across the enterprise:
- Establish a viable relationship between the CFO and the CIO
- Define current cost structure
- Extend cost structure to cloud computing
- Create agile cost computation models
- Facilitate transformation to the cloud
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!