Leveraging technology to drive revenue for the business is a key priority for many CIOs. As a result, many IT leaders are exploring infrastructure alternatives such as cloud computing to drive operational efficiencies and reduce costs.
A recent IDG survey of 554 IT professionals reveals that 71 percent expect to increase spending on cloud services this year. With the proliferation of cloud-based services, organizations need to look at when it makes sense to bring technologies in-house or partner with a third-party provider.
However, it’s no longer just the IT department making technology decisions. The internet has opened the door for “informal cloud buyers” creating shadow IT with new challenges for IT leadership. Transitioning to a more elastic infrastructure that includes a combination of cloud-based services and core applications will have far-reaching effects and requires IT assuming the role of business partner to help users make more informed IT expenditure decisions.
With IT touching every area of the business and wider adoption of cloud computing, IT leaders need to ensure they are speaking the language of value to optimize IT investments and create cost efficiencies. It requires a more transparent system and centralized control, so IT can provide greater visibility into the total cost of ownership of IT solutions as well as how services are delivered and consumed.
Cloud-service vendors are able to articulate their costs and tempt business users with lower prices and hassle-free service. For Internal IT to compete they need to “operationalize” internal service offerings and help business users understand the value of internally provided IT products and services, enabling them to make equitable comparisons with third-party ‘cloud’ solutions.
Weighing the decision between which IT capabilities should be procured in-house and which should be acquired from third-party providers requires business unit managers to understand which areas have the greatest potential for growth and return on investment and those that are non-differentiating. That means having the ability to track, manage and measure IT expenses to ensure they align with business priorities.
A focused IT financial and business management solution provides IT leaders with a centralized point of control to identify and document all IT contracts and costs and forecast future IT infrastructure spend. Using data, IT leaders can demonstrate the business case for internally provided service or an outsourced alternative by comparing the yearly contract costs with the organization’s project infrastructure spend.
Putting cost controls into place in a centralized manner allows the IT organization to have oversight for cloud services and be able to have conversations that help business unit managers understand where it makes sense to put their energy and dollars. Running IT like the rest of the business requires moving the conversation from faster and cheaper to how technology can be used to drive revenue. An IT financial management system that delivers cost and consumption information supports data-driven decisions, enabling organizations to simplify cloud technospeak for accurate cost comparisons and take a value-based approach to current and future technology investments.
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