Although the benefits of comprehensive Cloud utilization seem undeniable, many corporate decision-makers are staring at racks of hardware that represent a substantial capital investment. Doing the math on business savings by increasing your Cloud footprint may not appear palatable when you think about how much money you sank into those physical drives.
That perspective may be restraining your organization from enjoying the wealth of opportunities provided by expanded Cloud utilization. Thought leaders looking for ways to reduce expenditures and increase return on investment may discover that accounting for the so-called “soft” benefits of expanded Cloud utilization can resolve bottom line stress.
Philadelphia IT support professional Scott Clarke shares insights into the benefits of the cloud.
Rethinking ROI Capital & Operational Expenditures
It’s not unusual for business leaders to have varied expectations about Cloud ROI. But perhaps too many think only in binary terms. This is to say that Cloud-based investment may narrowly be perceived as an operational expense. Those racks of computers are often viewed as a capital investment. Such narratives revolve around a false investment versus expenditure dichotomy.
Consider, for a moment, that organizations typically invest revenue on in-house hardware that delivers an ROI of 20 percent or less. That’s large because enterprises generally purchase enough excess hardware to manage atypical peak utilization demands. Perceiving this “investment” into upwards of five times more physical computing technology than you need fails to meet prudent ROI standards.
The notion that the pay-as-you-go Cloud utilization falls into expense thinking — as if it were your electric or water bill — runs contrary to the general principle or frugal revenue management. What could provide a better ROI than a service that delivers a proportional return-to-expenditure model?
Identifying ‘Soft’ Benefits of Cloud Investment
Before delving into the qualitative benefits of expanding your Cloud footprint, it’s critical to remember that hardware comes attached to maintenance and upkeep expenses. Your organization likely pays an in-house tech staffer to handle these duties or outsources to a third-party. Regardless of where the total cost of ownership expenses falls in your ledger, Cloud-based systems roll those expenses into your monthly premium. By questioning hard costs against seemingly qualitative Cloud benefits, you may discover previously unrealized reasons to increase utilization.
Tallying incoming revenue and outgoing expenditures are routine P&L statement practices. But expense avoidance can be a tad slippery. When employees make honest mistakes such as downloading malicious software, your organization’s hardware system can suffer extended downtime. You might even be compelled to dole out a hefty ransom in bitcoin to regain operational control. Avoiding that cost cannot be adequately accounted for in a P&L spreadsheet. Of course, neither can damage to your industry reputation.
Multi-Cloud service strategies can easily sidestep such losses by storing digital assets out of harm’s way and limiting accesses. In many ways, these and other soft savings are like calculating the benefit of wearing a seatbelt while driving. You only realize the true value after a crash. These are other soft savings benefits that thought leaders may want to consider.
- Improve Customer Satisfaction
- Increase Productivity
- Provide Continuity, Recovery & Avoid Business Disruption
- Expand Talent Pools to Remote Workforce Candidates
- Increase Business Solutions
- Eliminate Unnecessary Purchases of Future Hardware
- Improve Business Agility & Ability To Evolve
Although professionals rarely dispute the hard cost benefits of leveraging the Cloud as a service, persuading others about how best to calculate its qualitative attributes requires advanced thought leadership. Pathways into a robust discussion may include running through “what if” scenarios.
- What if our in-house network gets hacked?
- What if a power surge damages the system?
- What if we have to evacuate due to an impending severe weather event?
- What if competitors gain a critical advantage by hiring remote talent outside our commuter area?
Considering the recent global economic disruption, “what if” scenarios are no longer a bridge too far. Organizations that continue to spend money on hardware inherently limit their ability to leverage IT solutions. If you take the time to consider the qualitative benefits of expanded Cloud utilization, you may find the ROI improves your P&L statement.