Aligning the business and IT case for cloud-based services
In many organizations, IT departments are eager to adopt cloud computing solutions, recognizing the benefits tools such as hosted collaboration systems can offer in terms of scalability, management options and flexibility. While the technological advantages created by such solutions are significant, they are not the only way in which the cloud enables improvement in the enterprise. IT executives who fail to recognize the business case as well as the technical justification for the cloud may be underestimating not only how their department can drive innovation but also may be missing a chance to engage with and excite their C-suite counterparts.
A recent study from PricewaterhouseCoopers found that organizations in which CIOs and other C-suite executives are closely aligned are four times as likely to be top performers as companies with less collaborative relationships between IT and other departments. Well-aligned organizations have what PwC referred to as a high Digital IQ – a measure of how well technology is interwoven with business processes. These companies are more aggressive in their IT investments, more supportive of emerging technologies and more explicit in their measurement of innovation. They have an explicit process for linking business strategy to the IT roadmap.
“Companies with higher Digital IQs think differently about their IT strategy, opportunities, and risks,” said Tom DeGarmo, a principal at PwC. “Organizations with collaborative C-suite relationships have a shared understanding of corporate strategy between IT and business leaders and understand costs to implement that strategy.”
The business case for hosted services
While some tech professionals continually focus on minor technical disputes over the functionality of the cloud – many of which may soon be rendered irrelevant as the technology stabilizes – they are neglecting the opportunity to point out the innovative advantages of such services, Forbes contributor Bob Evans wrote in a recent blog post. Companies can substantially reduce the share of their IT budget allocated for keeping the lights on, thus freeing up resources for innovation, by switching to managed solutions.
Evans suggested that this budgetary shift should be the top priority for CIOs in 2013. He proposed following a three-year transformation from a budget with 78 percent of spending devoted to infrastructure and 22 percent devoted to innovation to one with a 65 percent/35 percent split. The cloud allows companies to avoid the initial capital expenditure of traditional IT, enabling a greater focus on customer experience, collaboration or other business innovations.
One of the areas in which the cloud can be most effective in shifting budgets from capital expenditures to operational costs of using a service is hosted collaboration. Cloud unified communications (UC) solutions cut the cost of new deployments, upgrades and added users, allowing businesses to reallocate their budget toward broader business innovations.
“If UC is a platform, rather than a product, then the long term goal of UC should be to take tools and embed them into business applications which allow users to alter business processes and create new ones,” a Computer Weekly report noted. “Embedding such tools into applications allows us to automate or make more intelligent communication choices about the way we work.”