Cloud computing has been a driving force of innovation for companies worldwide for several years, and the hype isn’t going away any time soon.

For many, the cloud is already a fact of life, seventy-three percent of organisations have at least one application, or a portion of their computing infrastructure already in the cloud – 17% plan to do so within the next 12 months, according to IDG’s Enterprise Cloud Computing Survey, 2018. That could mean that >90% of businesses are now in the cloud and digitally based.

However, as staggering as these statistics may be, the adoption of cloud computing as a solution hasn’t been nearly as quick as initially predicted. Many companies are hesitant to implement cloud solutions due to conflicting views about the true financial benefits.

“While it’s said to be cheaper than on-premises, cloud gets push-back from the finance function because it increases operating expenditure (Opex) costs,” says Sanil Solanki, research director at Gartner. “IT departments let finance take the lead on this decision, and this stalemate is rarely broken.”

Cloud may bring flexibility, but those who are reluctant to commit fully to the cloud have valid financial concerns. In order to determine whether a cloud solution is the right strategy for your organisation, you must have a holistic view of your IT finances. Cloud computing has the potential to cut costs and drive revenue in the long run – but only if the solution is implemented on time, within budget, under the right circumstances, and with clear visibility of what those costs deliver.

In other words, you need an IT financial management strategy coupled with the right Intelligent ITFM software solution to ensure your cloud project produces investment returns you are expecting.

Start your Cloud analysis with these three steps:

1. Align potential value with your organisations goals

While cost reduction is certainly a priority, it should not be the sole determining factor in your decision to move to the cloud. Figure out exactly how cloud computing will benefit your organisation as a whole. Will a cloud solution allow you to simplify your vendor management? Will it allow you to streamline your internal processes? Will it save time for your IT department or make you more agile? Narrow down your reasoning for implementing the solution, so you can equate the estimated IT costs versus the potential savings and with your desired business outcomes.

2. Determine the true cost and value of every application

In order to make an informed decision, you must analyse all the necessary data. That’s much easier said than done. Many IT departments lack the capacity to convey their costs in terms of the business demands and the actual services they provide. To ensure your costs are fully transparent, consider using a purpose-built Intelligent IT financial management software solution. With the automated reporting features, you will be able to compare your actuals versus your budget, link your IT investments with business value, and perform What-If analysis to allow detailed cost comparisons.

3. Compare cloud vs. on-premise costs

The ability to pay only for what you use is a top-selling point for the cloud, as organisations are striving to become more efficient. However, if your applications were not designed to run in the cloud, you must consider the upfront cost of redeveloping them – in terms of time, resources, and infrastructure. Many companies will discover that some of their applications would be better served in the cloud, while others are best left running on site. Ensure your cloud provider supplies detailed invoices so that you can clearly see which applications drive what portion of the spend. A “one line” invoice makes it difficult to understand the real cost of the services you provide your organisation. Integrated intelligent ITFM software can produce a clear defensible Bill of IT that everyone understands.

Once your IT team has evaluated these costs, your IT leaders will have a baseline to estimate the budget and project requirements. You will also be equipped with invaluable information to pitch your cloud computing solution to the other decision-makers. When the IT department and the Finance department can speak a common language with service-driven data, the entire organisation benefits.

So, why aren’t you in the cloud now?

To learn more about our world-class cloud-based ITFM software, Speak to our team to schedule a demo.