Written by Jan Heinen
The Cloud is becoming increasingly important. Many ICT services are already done using the Cloud and organizations and individuals sometimes even use the Cloud without knowing it. As a Finance Professional, it is important to know how the Cloud works, so that you at least know which important questions to answer when preparing a business case involving Cloud technology. After all, with this knowledge you will be able to make the right considerations, make a good analysis and, together with ICT, make the right decisions. In the conversations we have with members of the Finance on a Mission community, we regularly receive questions about the use of Cloud technology. Based on these questions, we talked to a number of Cloud experts in search of answers. In this compact article we would like to give you an impression of the Cloud, and we will go into the possible benefits of the Cloud. We also give you five important considerations that you, as a Finance Professional, should make when deciding on a transition to the Cloud.
What is the Cloud again and what potential benefits does it offer?
Cloud computing involves making hardware, software and data available on demand. This is done from a network of computers where the user does not know where the software is running or where the computers or data are located. The way in which the infrastructure is organized is therefore not visible to the user. Within the Cloud, different options are possible. For example, the Cloud has Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). Each form of Cloud services has different characteristics and requires a different approach. Cloud services are provided publicly (identical service and servers from the provider), privately (not shared with other customers) or hybridly (a combination of both).
What are the potential benefits of using the Cloud?
Using the Cloud can have great benefits. For example, in the case of the Cloud, it is the provider of the Cloud service that takes care of management and maintenance of the systems and software. This reduces the complexity of IT management by the own organization. The consequence of this in turn is that knowledge of management and maintenance is not required in the organization. This will also probably reduce the costs for the IT support organization and you will always have access to the latest versions of the software.
Another benefit is in the scalability of the Cloud. Need new capacity? No problem, via the Cloud provider this is quickly organized. And you can scale up or down with exactly the extra capacity you need. As a result, your organization does not need large investments in the IT infrastructure, in servers and in the security of the environment where the infrastructure is located.
Because cloud services are charged on a subscription basis, there are also predictable costs. These are related to (usually) the number of users that your organization has in the Cloud.
However, the advantages are also offset by disadvantages. For example, you do not always know where the data is, it is difficult to get out of the Cloud again and there is still a mutual dependence. It is therefore important to carefully consider which Cloud strategy is convenient for your organization.
Five key considerations when transitioning to the Cloud
- Why do I want to have a Cloud solution?
This consideration is essential for determining the Cloud strategy to follow and at the same time the starting point for the other considerations. For example, the Cloud can play an important role in cost savings. By bringing services to the Cloud, less in-house ICT capacity and infrastructure is needed. This immediately leads to savings. Another reason for using the Cloud can be a need for agility and flexibility. The agility lies, of course, in the scalability of the Cloud, which has already been mentioned among the advantages and which makes it possible to quickly build up and down capacity. However, the Cloud can also play an important role in the deployment of Big Data, to shorten ‘time to market’ or, for example, to get a more predictable cash flow.
- What type of Cloud solution fits us?
This consideration is also essential and depends on a number of dimensions. For example, the type of software you work with influences the choice of IaaS, PaaS or SaaS solutions. For example, very specific software is not delivered as a SaaS solution and different software applications are often difficult to link in a public Cloud. The need for in-house ICT knowledge can also be a relevant choice for the type of solution you choose. Another element that is important is related to the sensitivity of the data that you have as an organization. Is it strategic information or privacy-sensitive information? The sensitivity of the information, coupled with the risks that you as an organization are willing to run, will influence the choice of a private or public Cloud solution.
- Where our data may reside?
It is not always clear where the data is located when data is transferred to the Cloud. Yet it can be very relevant for the organization to have a grip on this. In the United States different laws and regulations apply than in the European Union. It is worthwhile to make a conscious assessment of this. Who is allowed to access your data and why? What do you want to do with your customers’ data? Does it have to fall under European legislation or does it not really matter? With many Cloud suppliers you can make agreements about this.
- How to maintain control over the Cloud?
In a transition to the Cloud, you relinquish a significant part of the control. You just don’t want to lose control of your ICT. Take the disadvantage of the growing relationship of dependence between you as a customer and a Cloud provider. This dependence should not lead to a lock-in so that you can only get rid of each other at very high cost. Think here, for example, of the retrieval and storage of data elsewhere. But also in terms of uptime and availability you want to be able to determine what requirements you set.
- How do I organize the security of my data?
A theme that is gaining in importance is data security. How do you ensure that the data is protected against cybercrime, what measures do you want to take as an organization to prevent break-ins and what do you do in case of a leak? A transition to the Cloud can mean that your security will actually improve (the supplier provides more stringent measures and often has a lot of expertise in that area), but the Cloud is also a more interesting target for cybercriminals. Agreements about security are essential because the choice for a transition to the Cloud does not relieve you from your responsibility for the data. In the world of Cloud suppliers, you see many standards and certifications being created to prove that things are okay in this area, among others.
The above five considerations should at least be part of the business case for the Cloud. As a controller, you need to have a good understanding of how the Cloud works and how you make and assess the business case for the Cloud. And here, as with in-house ICT, the results of your considerations have a direct impact on the costs.