Investing in Cloud? Top Cloud Finance Questions You Must Ask

Ask these questions today and bring IT on the same page with regard to cost control when investing in cloud.

CFOs today are required to take ownership of the data in the company as stewards. This is a new facet of their evolving and emerging role in the rapidly transforming enterprise. The requirement is of a tech-CFO who can lead the way for the organization in the digital world. 

More organizations are today shifting to cloud-based infrastructures – in 2018 Gartner forecast that the worldwide public cloud revenue will grow 17.3 per cent in 2019. Good news no doubt from the technology perspective, but for finance, “elastic infrastructure” is a challenge. It calls for CFOs to re-prioritize ROI to ensure that benefits of technology investments are fully realized. A tough call indeed to balance investments, justify technology spend and ensure a culture of innovation and growth. 

To counter the challenges of cloud finance, CFOs must ensure capital optimization by lowering costs and all the while continue prioritizing business models that enable transformation and expansion of the business with built-in flexibility. 

Flexibility brings in complexity and complicates the CFOs task of managing, deploying, and the toughest, forecasting.

Rapid growth of the organization should not blindside the CFO to the risks of cloud spending spiralling out of control. This would mean that the investment in cloud has become counterproductive. 

Many of the problems can be solved if the CFO and the CIO are on the same page. Issues can be ironed out and disconnects connected in the mutual pursuit of cost control as part of the actionable and executable plan.

Jay Chapel, co-founder and the CEO of ParkMyCloud, in an article he penned for https://www.business2community.com provides some insight on how the CFOs can control cloud spend by addressing the following cloud finance questions and understanding their impacts on operations. While lowering costs is one of the primary reasons for organizations moving to the cloud, these questions help ensure that finance and IT departments are in sync.

1. Are we thinking about the cloud cost model correctly?

The answer to this would help the CFO  gauge that the cloud purchase is not of far more capacity than actually needed. The use of the cloud should be based on the real-time needs, and capacity and the CFO should be able to ascertain that they are not overspending in cloud resources that will be lying unused  for much or all of the time. Talk to the CIO about cloud spend and gently lead IT into an OpEx mindset, rather than the on-premise model of CapEx.

2. Are we wasting cloud spend?

Another critical question. Most often the answer is a resounding yes, thanks to idle resources. The cloud runs 24/7, but most non-production resources used for development, testing, staging, and QA are only needed during the work week. What it means is that if you are working only 5 days a week for 9 hours, you need not be paying for resources after work hours and on the weekend. The size of the resources also leads to waste due to massive underutilization. Size down your resources and you will realize 50-70% cost savings!

3. What steps are we taking to control and reduce cloud spend?

IT’s focus is on growth not cost control. As the finance head you need to ensure that cost control measures are also in place on public cloud. Ask for an actionable plan to combat wasted cloud spend. Ask for reports project and team wise. A cloud optimization platform with automated and analytical capabilities can help discover cost-savings opportunities and enable more efficient workflows between departments.

It is in the hands of the finance team as to how they push the cloud conversation toward optimization of resources, without affecting the IT department’s innovation. A competitive cloud finance strategy that includes visibility, flexibility, and governance will help increase ROI, reporting, and in fact, the implementation of solutions to enable the company to thrive in the cloud environment.

Source: Read more at https://www.business2community.com/finance/top-cloud-finance-questions-from-cfos-02180983


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