Build Your Cloud Business Case
Getting serious about a cloud computing implementation? Then it’s time to start thinking about how you’ll build your cloud business case.
First things first: let’s talk about the elements that will go into your business case. Then, we’ll flesh out some of the specific business benefits you may be able to achieve with cloud computing. Lastly, we’ll discuss the most exciting part: potential savings.
Key Elements of a Cloud Business Case
What should you include in your cloud computing business plan? In a 2006 white paper entitled ROI Analyst Methodology,â Alinean, the leading developer of value-based online interactive tools, recommended focusing on several key components:
- Questionnaire. Use this to collect census and opportunity information from your organization.
- Solution Selection. Specify the solution options you plan to implement.
- Tangible Benefits. Explain the quantifiable benefits you expect your company to achieve from implementing your cloud solution.
- Solution Costs. Quantify the initial and ongoing investments for implementing the cloud solution. These may include capital expenses, implementation costs, ongoing management and support, operations and contracts, and business unit costs.
- Financial Summaries. Include a traditional ROI analysis that compares the project’s costs and benefits over a five-year period.
- Intangible Benefits. Describe the benefits that are either not quantifiable or very difficult to quantify.
- Risk (What-if Analysis). Assess the impact of various risks, especially if they may lessen the project’s overall benefits.
Where to go from here? Fill out this framework with detailed information about current business challenges and how you plan to solve them.
Address Major Business Challenges
Cloud computing can help you address a wide range of business challenges. If you’re like most of your peers, you’re dealing with:
- Reduced budget and staff. According to the IT Spending and Staffing Benchmarks 2010/2011 study provided by Computer Economics, a survey of more than 200 IT executives in early 2010 revealed that:
-45% of organizations were increasing their IT operational budgets.
-42% of organizations were cutting their IT operational spending.
-42% of IT organizations were reducing headcount in 2010, while only 28% planned to increase it.
-Only 48% of IT executives felt their budgets were adequateâ or more than adequateâ to meet the needs of their businesses.
- Â A constant demand for better services. Even in a tough economic climate, management continues to ask IT for faster return on investment. They want more flexible infrastructure services, greater resource productivity, and enhanced reliability and resiliency.
- Multiple corporate systems running on dedicated servers. Many business software vendors require that companies install their applications on a dedicated server. This policy is designed to ensure optimal performance from the application â but it can place a significant burden on the IT departments of companies that are running several large business applications.
- Rising storage costs. Today’s company databases are best measured in terabytes â or even petabytes â and their growth shows no signs of slowing down. As if that weren’t enough, companies often make copies of the entire Production database for testing and development.
- An imbalance in IT staffing. The IT department is supposed to add value by deploying technology in innovative ways to make the business run more smoothly. Instead, the typical IT staff is more focused on supporting the IT infrastructure than on improving service to end users.
- An imbalance in server workloads. The typical company server room or data center consists of some servers that only ever use a fraction of their computing power â and others that frequently crash from overuse.
- Problems and delays in provisioning new equipment. How long does it take your company to provision a new server? Companies routinely report provisioning times of at least one business day, and deployment times of up to several weeks.
You won’t necessarily find space in your business case to describe how cloud computing solves each and every one of these problems. But we hope we’ve given you some compelling fodder for a brainstorming session or two.
Achieving Savings in the Cloud
And now we come to the most important question: how much money will cloud computing save your company?
Unfortunately, it would be nearly impossible to estimate an exact dollar figure for the savings you can achieve with cloud computing. Since no two companies are exactly alike, the cloud will have a different financial impact on each one. According to a recent IBM white paper, your level of savings can depend on the types of workloads you process, the delivery method you select, the efficiency of the infrastructure to be replaced by cloud, and many other factors.
But companies clearly see the potential. The same IBM white paper reveals the results of a survey in which 77 percent of respondents chose cost savings as a key driver for public cloud adoption. They anticipated savings in software licenses, hardware, labor, IT support, and maintenance.
We would love to help you get a ballpark figure on the savings cloud computing can deliver to your organization. Call ConRes today or view our Getting to the Cloud Practical Guide.