Cloud Finance: What CFOs Need to Know

Cloud Finance: What CFOs Need to Know

• For Managers
• June 01, 2019

Organizations are increasingly shifting to cloud-based infrastructures. This is good news for technology and innovation, but could make finance executives break into a cold sweat. Cloud resources are hard to manage and even harder to forecast, leading to a delicate balance of managing costs while encouraging innovation and growth.

Cloud Finance can be hard to Control

The latest business models tend to be flexible in order to optimize growth while decreasing costs. This renders cloud expenditure, specifically, difficult to manage, deploy and forecast, since cloud usage is constantly changing in order to accommodate growth.

If cloud expenditure is not carefully monitored and curbed where necessary, it could easily spiral out of control, raising the question of whether it actually makes business sense. For this reason, finance and IT departments must work together closely in order to reach specific business goals, allowing cloud expenditure to be controlled and forecast as accurately as possible. With the right strategy, this is completely achievable.

In this article, we will explore some of the most pertinent questions CFOs should be asking in order to get the finance and IT teams on the same page regarding cost and cloud optimization.

Does our Thinking Match the Cloud Benefits?

Moving to the cloud means that you purchase flexibility – cloud resources can be upscaled or downscaled based on your current needs. This is in direct contrast to the older on-premises model, where you had to purchase more storage space than you currently need in order to provide for future needs.

Many companies overspend on cloud resources, since they are still using the old on-premises mindset. It is important to review thinking patterns in order to match the cost benefits made possible when moving to the cloud.

Are we Wasting Money?

If you have any idle resources, you definitely are. Usually, cloud resources run around the clock, unless they are turned off. Usually, though, these resources aren’t being used 24/7, especially those that are related to development and QA – departments that usually stick to office hours. Since you pay for the time that these resources are switched on, you could stand to waste upward of 65% of your cloud spend.

Oversized resources are another culprit. This ties in to the previous point – many companies purchase far more resources than they currently need, wasting as much as 70% of their spend.

How do we Control and Reduce Spend?

IT and development teams are focussed on growth, while finance focuses on reducing costs. Here, the finance team must usually ensure that automated cost control measures are put in place to eliminate wastage. It is also a good idea to request reports detailing cloud usage by each team and project. Over time, this overview could indicate areas where usage can be optimized. There are many cloud optimization tools that offer automated, built-in analytics, making this task even easier and rendering the workflow between departments more efficient.

In Summary

Finance and IT departments must work together in order to optimize cloud expenditure. This will allow for innovation and growth while minimizing costs and eliminating cloud wastage. Cloud governance strategies should be flexible and transparent in order to promote effective functioning across all departments.

CloudSnooze is the ideal partner for optimal cloud governance and cloud waste elimination. Contact us today for a free trial.