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A CFO’S GUIDE TO
A CFO must manage financial risk for a company, spotting threats and opportunities that can transform the business. The latest transformation is taking place as businesses choose to move from internally managed computer systems to Cloud-based IT. In this guide, we will be examining what Cloud computing is, and how it can benefit your enterprise by giving you operational agility and the ability to cut capex costs.
INTRODUCTION
2013 is the year of Cloud. Again. Why is this?
The recession has hit Britain hard and it can be an uphill struggle for companies to get out of the economic doldrums. At the same time, computing and IT are going from strength to strength, with more and more businesses transitioning to the Cloud, with its promise of increased agility and ready access to more computing resources for less money. The outlook for 2013 doesn’t make great reading, with growth forecasts revised down to 1.2% from 2.0%. According to a recent survey of CFOs by Deloitte, ‘businesses are constrained by low growth and uncertainty… CFOs cannot rely on steady growth to lift revenues.’ Against this backdrop, the Cloud offers opportunities for CFOs who are looking to reduce capital expenditure on IT by moving to a primarily per-user-per month operating cost.
WHAT IS THE CLOUD?
The Cloud is a term that is bandied about a lot, leading to an inevitable lack of clarity as to its meaning. Simply put, the Cloud is a concept which delivers remote computing services to users via the Internet or a Virtual Private Network online.
There is no monolithic Cloud, but rather, many distinct Clouds, hosted in data centres.
• Public Cloud - available to the general public as a ‘best effort’ service, such as Amazon’s Elastic Computer Cloud (EC2)
• Private Cloud – enterprise-class, privately hosted services and storage behind a firewall, such as Cloud provided by a Managed Service Provider (MSP)
• Hybrid Cloud – a mixture of private and public Cloud
As well as these terms, there is also the ‘as a Service’ label, which can often be overused by providers offering seemingly everything as a service. In reality, there are only three that you need to worry about.
TYPE DEFINITION
PaaS Platform as a Service provides computing platforms
on which to launch and configure software • Reduces Total Cost of Ownership (TCO) • Scalable
• Used for rapid construction of applications IaaS Infrastructure as a Service delivers virtualised computer
infrastructure such as storage and virtual servers
• Scalable • Flexible • Green SaaS Software as a Service delivers software applications
over the network
• Accessible • Scalable • Lowers costs • Effortless to upgrade
WHY CHOOSE THE CLOUD?
The Cloud presents a compelling opportunity. Capital costs are drastically reduced by progressing to the Cloud, because there is no need to purchase expensive computing hardware and software. Operational costs that were used to power and maintain this equipment are also reduced or eliminated. IT staff can be reduced, or set to work on business critical processes.
Cloud solutions are scalable, with user numbers and applications adjusted up or down depending on your business need. Applications trials can be done without large licence fee expenditure, and fees and risk can be spread out as new applications are rolled out to users gradually.
SECURITY
Cloud providers have much more expertise when it comes to securing data than a typical internal IT department. Information security is paramount to a business handling potentially sensitive information, which is why private Cloud vendors adhere to information security protocols such as ISO 27001 and PCI security standards.
CLOUD FOR
BUSINESS CONTINUITY
One of the key points about the Cloud is its accessibility. So, should the unexpected happen such as a power outage or a weather catastrophe, access to data and service disruption is kept to a minimum.
Data and applications can be
accessed from anywhere, at any time, which makes the Cloud the perfect option for both remote workers and employees on the move, as well as office workers.
CLOUD PROVISIONING
Cloud computing means that the time between identifying a technology requirement and meeting that
requirement can be drastically reduced, providing rapid access to resources on demand.
Users can be added on demand and storage can be increased as and when required.
CLOUD FOR BUSINESS
The transition to the Cloud can give enterprises an advantage over their competitors by allowing them to be more flexible and agile, with more provision for game-changing projects and innovative practices.
WHAT ARE THE RISKS?
Businesses must ensure that their Cloud provider has strong security in place, both in respect of the data and the systems which hold the data. In the event of an outage, the Cloud vendor must have redundancy built into the system to allow for a seamless failover, ensuring continuity of service to customers.
Security also comes from choosing a provider who has financial stability; who has the ability to provide business-grade services and to keep on providing these services at the same high standard throughout the life of the contract. Cloud providers should offer 24/7/365 support which is based in the UK and manned by knowledgeable staff who can properly help you with any issue at any time, day or night.
CAPITAL COSTS ARE DRASTICALLY
REDUCED BY PROGRESSING TO THE CLOUD,
BECAUSE THERE IS NO NEED TO
PURCHASE EXPENSIVE COMPUTING
WHAT QUESTIONS SHOULD
THE CFO ASK THEIR CIO?
The IT budget is often the largest expense for a company. CFOs should ask their CIO how they can best utilise the move to Cloud.
• Is private or hybrid Cloud the best option for the company?
• Which Cloud services can offer the fastest savings? For example, switching to Cloud telephony can typically give businesses up to 65% over the life of the contract.
• Which applications can be moved to the Cloud?
• Have applications been built for the company which can be offered to others via the Cloud for increased revenue?
• How many man hours could be redeployed to frontline services by moving applications to the Cloud and virtualising infrastructure?
CONCLUSION
Moving to the Cloud should not just be an IT priority, but a business priority. By taking the journey to the Cloud, businesses can manage their finances by reducing upfront capex costs, replacing them with easy to manage opex costs. Not only that, but the Cloud gives businesses the opportunity to be more agile and flexible, while still being confident about data security.
CFOS SHOULD ASK THEIR
CIO HOW THEY CAN
BEST UTILISE THE
MOVE TO CLOUD.
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