How to make the business case to implement cloud
Posted by: Nigel Collins
So, the board having recognised the benefits of migrating their telecoms, data and applications to the cloud, have set you, the IT director or CIO, the task of heading up the implementation.
They may have given you a budget based on the expected growth in sales that your strategic advisors tell you will result from increased collaboration, scalability, efficiency and customer satisfaction or you may have been tasked with making the business case. The transition from CapEx to OpEx may help leverage this but you will still need to arrive at an annual budget.
The issue is of course, assuming that you even have time to do all of this, is that before you can even start to draw up a budget, you need to know where you are now:
- Which suppliers are you currently using and what services are they providing?
- Is there redundancy and overlap between services?
- What contracts do you currently have in place and how long are you committed to them?
- What is the current annual cost?
- How satisfied are you that your incumbent suppliers can meet your new requirements partly or in full?
- Should you be sourcing new suppliers and if so, which suppliers will you trust to deliver what you need and how will you properly benchmark where you are now?
The key of course is to remember that whichever suppliers you talk to and however good a working relationship you may already have with them, they want to sell you their products. They may attempt to make a business case for their products but based on over-inflated cost savings or over-promised service levels. You should therefore consider engaging with Auditel so as to take an independent view and to source the right suppliers.
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Recognising the need for evidence-based decision-making, we are pioneers of a brand of strategic cost management, called Total Cost of Purchase® – now widely recognised as the most effective method of managing costs holistically, reducing waste, and improving profits.