September 21, 2016
5 Cloud Questions Every CFO Should Ask
If your organization is looking to shift more of its IT resources to the cloud, you are not alone. After all, 50% of every company’s IT infrastructure is expected to be cloud-based by 2017. But before you go too far, it is wise to take steps to ensure you and your CIO agree on where you are going and how you are going to get there. You can start with some candid conversations about how the cloud is going to help achieve key business goals.
Here are some suggestions for beginning a productive dialogue about cloud computing with the CIO.
1. How will cloud computing help lower IT costs?
You and your CIO are probably already on the same page about the cloud’s ability to help reduce overall costs by shifting capital expenses to operating expenses, and that shared understanding will provide a good context for this conversation. With that as the foundation for your discussion, ask:
- What portions of IT can be run less expensively by moving to the cloud?
- To what extent can we expect to decrease capital spending as a result of moving to the cloud?
- Will it be possible to save by buying Software as a Service (SaaS) licenses as needed rather than having to project our needs up front?
As you explore this topic, also keep in mind the impact of moving to the cloud on financial processes that you oversee, such as budgeting, fixed asset management and tax reporting.
2. What is it going to cost to get us to the cloud?
Hand-in-hand with the conversation about what the cloud can ultimately save the business, is the question about upfront costs.
- How much will your organization need to invest in evaluating cloud services providers and selecting the right one?
- What about migrating systems and training people – how will those costs stack up against the savings the cloud will deliver?
Even if the long-term savings are clear, it is vital to have a firm grasp on the initial costs, as well as costs associated with potentially reduced efficiency and income while making the transition to the cloud.
3. Can the cloud add strategic value – beyond helping us run our internal IT better?
Organizations benefit most from cloud applications that not only improve IT internally, but also add value to external customer relationships. For example, you want to be able to quickly develop and test new services. Ask if the cloud is going to make that possible – and how it is going to work. Another way the cloud can play a more strategic role is in analytics. Like many organizations, yours probably keeps sales data in the cloud through a SaaS application. Ask the CIO if migrating to the cloud will make it possible to leverage cloud-to-cloud integration to improve analytics. If so, it could mean the ability to better leverage analytics without having to build a data warehouse.
4. What will be our approach to security and compliance in the cloud?
Concerns about security in the cloud is not as great a barrier to adoption as it once was, but you still need to feel confident that the business will remain secure as you move IT to the cloud. Good questions for your IT leaders include:
- Do we need to get our internal audit involved when we migrate to the cloud?
- Will we be able to continue to follow our security protocols and audit policies, or will we have to change them based on the cloud platform we choose?
- Do you anticipate we may be more secure in the cloud, given that cloud services providers will have dedicated teams for change control, patch management and other processes that enhance security?
- And if that is the case, do we need to rethink our security strategy to rely less on our own data centers that may not be as secure as we once thought?
5. What about a plan to deal with shadow IT?
Shadow IT is on the rise, as more IT devices, software and services continue to be outside the ownership or control of IT organizations. This rapid growth is partly driven by the quality of consumer applications in the cloud such as file sharing apps, social media and collaboration tools, but it is also increasingly driven by lines of business deploying enterprise-class SaaS applications. In the age of cloud computing, all it takes is an employee with a credit card to spin up a server or purchase SaaS licenses. Shadow IT can also become a compliance concern when, for example, an employee stores corporate data in their personal DropBox account. With this in mind, some key questions to ask include:
- How can we protect our corporate data from exposure to unsecure cloud applications?
- What is the strategy for preventing cloud-enabled shadow IT from compromising our data security?
Bringing It All Together
When it comes to cloud computing, CFOs and CIOs have a lot to talk about. They also have an opportunity to forge an alliance to be sure moving to the cloud generates greater business value for the organization. If you are a CFO, sitting down to ask questions and exchange views with your CIO is a great way to start to develop a shared vision and approach to cloud computing that will serve you both well – and serve the organization overall.
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