Organizational Considerations And Business Impacts Of Cloud Empowered Technologies

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In light of the rollicking pace at which technological transformations are realized in the times of today, and considering how short technology lifecycles have become, several IT organizations have adopted a ‘wait and watch’ and ‘convince me before I spend a penny’ approach towards technology adoption. However, there are tech platforms that offer such significant cost advantages, long term savings, and convenience that most IT departments are willing to take the leap. Cloud computing has witnessed this ease of adoption, primarily because of the supreme convenience, scalability, and cost savings it has to lend to businesses of all sizes.

For any organizations in the middle of a cloud transformation, or for companies looking to make their first moves into the realms of cloud enabled technologies, now’s the time to understand the organizational considerations and business impacts, and align their technology choices to organizational goals and capabilities, for the maximum advantage. Here are the major organizational components that are impacted by cloud computing. Finance: Your organization’s move-over to cloud computing is accompanied by significant financial management implications.

  • Because of the shift from a capital expenditure to an operational expenditure model, your IT expenditure design changes, and this directly affects the financial management strategies built around existing expense management.
  • By adopting cloud computing, organizations can free up cash in the beginning of the financial years (when most tech contracts are renewed).

The cost cutting, liberation of IT expenditure dollars at the beginning of financial year, and decisions around allocation of freed up budget towards IT research and development – these are the most critical financial decisions that the cloud transformation invariably brings on the discussion table for any organization.

Internal Auditing

Methods of application management undergo a significant change with the cloud computing transformation, because businesses no longer own or directly control the IT hardware that’s at the core of the cloud services.

  • Cloud computing consumers need to upgrade, modify, or completely replace their existing IT systems to leverage the convenience and flexibility of cloud.
  • Processes and plans centered around measurement and control of IT usage need to be updated in sync with the cloud technology delivery model.
  • SLAs become tighter, which increases the service value for cloud consumer enterprises, which increases the importance of regular measurements and re-negotiations.
  • Internal audits need to start looking into value maximization more than the organization’s IT infrastructure’s compliance to industry standards.

Taxation

Depending on the country and the industry you operate in, taxation considerations around your cloud computing expenditures change. Whereas some taxation experts regard cloud computing services as a ‘lease’ kind of expenditure, and there are others who regard it as a service expenditure. Because the tax treatment of these expenditures is different as per corporate taxation laws in different countries, it becomes an important consideration or businesses while choosing which components of their IT infrastructure they’d want to move to cloud. Also, even vendors are aligning their service models to maximize the taxation advantages for enterprise consumers. Considering how cloud computing services will continue to be a month-on-month expenditure for businesses, this decision has ample financial considerations for the long term.

Sales And Marketing

Sales and marketing driven organizations have so much to gain out of cloud enabled services that their business growth can be put into overdrive if they use the right technologies, services, and processes.

  • By enabling real time access to smart and actionable inputs based on organization’s data, visual reports, quick update and upload of information, and data analytics, cloud computing services significantly empower sales executives, sales planners, product designers, business developers, and business directors.
  • Customer service management is another area that has witnessed massive improvement in several organizations because of cloud enabled CRM technologies.
  • These SaaS (software as a service) model offerings from cloud computing vendors help employees collaborate, enable better workflow management, and solve problems in real time.
  • Cloud technologies are aligned to big data, cybersecurity, and IoT, which means that organization’s investing in these platforms today will witness major IT synergies as other platforms mature.

Compliance and Risks

Essentially, cloud computing means that your company’s data will not be co-located at a shared server space, and the vendor manages the server end-to-end. This creates critical compliance and risk assessment concerns for organizations. With knowledge of these issues, organizations can negotiate with their vendors in a better manner in terms of the security functionalities bundled with the service. Advanced encryption, intrusion detection, antivirus, and regular backups – these are the 4 critical components of wholesome cloud data security. After defining the criteria for measurement and evaluation of cloud security, your organization will need to move to the operational steps towards risk mitigation. Industry standards for cloud hosted application security are maturing, and your business would do well to stay in sync with the same.

Mauricio is the lead Cloud expert at Cloudwards.net, a data and user feedback driven comparison engine for cloud storage, online backup and VPN apps and services. In addition, he also loves producing educational videos and reviews to help people get the best services for their needs. Get in touch with him on LinkedIn.

 

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