Why cloud should be a core part of business financial planning

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Financial planning is essential to business success. It is the foundation upon which goals are visualized, growth is achieved, and capital is created. But, within an organization’s financial planning roadmap, one often-overlooked – but extremely significant – area is the cloud.

The cloud is a little over 10 years old now and, within that time, it has moved from a nice-to-have to an indispensable business process. The cloud usually runs on a pay-as-you-use model. While this offers enormous flexibility and agility to organizations, it can also lead to huge costs if not properly monitored or controlled.

In fact, inadequate financial planning for cloud processes has left many organizations with a horrible case of “bill-shock” – the realization that cloud expansion has not been as closely supervised as it should, leading to unused infrastructure that accumulates a hefty and unsightly bill.

For an organization’s cloud model to be sustainable and cost effective, use and demand must be closely controlled. By gaining control of cloud spend, organizations open themselves up to a wealth of opportunities. With more financial leeway, IT departments can move from being operational and reactive to enabling innovation and wider enterprise transformation.

Cloud economics: enabling IT innovation

Moderating cloud spend is its own discipline. At Capgemini, we call this discipline cloud economics: a strategy for visibility, monitoring, and control over cloud finances. The process creates transparency in your cloud use and forecasted consumption, to create a culture of cloud cost accountability and transparency.

Cloud economics is multifaceted, taking into account potential and current cloud use. For example, let’s look at managing cloud service integration. The cloud enables new services to be delivered within minutes, meaning it is all too easy to add services to your enterprise. But, of course, new services come at a price. Through cloud economics, organizations analyze whether or not new services are really needed, based on the value they will deliver and the cost.

Another facet of cloud economics is identifying those cloud services that are now redundant – resources that aren’t being used by the organizations but are still active, creating a drain on costs. Cloud economics enabled you to turn these resources on and off as needed – scaling up and down – depending on your organization’s specific needs. Then there are those applications that are still being used – but not as cost efficiently as they could be. Cloud economics analysis gives organizations the ability to retrospectively inspect their policies, procedures and governance within the cloud for inefficiencies, and then make the needed adjustments.

It’s important to note that cloud economics is not a one-off process, but an ongoing evaluation of cloud use, services, and configurations. An organization’s cloud architecture will evolve over time, based on demands and enterprise requirements. It’s important too, that cloud spend configuration is dynamic and responsive, ultimately becoming integrated into the organization’s cloud operating model as a continuous operation.

Helping you make the most of the cloud

At Capgemini, we work with our clients to weave cloud economics into your cloud strategy, so that it is part of the continuous process across migration, building, innovation, and operations. Drawing upon a wealth of client experience, Capgemini offers consultancy to businesses looking to optimize their financial operations for cloud services.

As a first step, our Cloud Economics and Optimization Assessment will help to maximize your success. Our experienced team of cloud-accredited professionals will help you plan, detect, identify, and recommend necessary cost optimization.

To find out more about Capgemini’s Cloud Economics and Optimization Assessment, click here, or you can get in touch with a member of our team here.

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