Cloud services are an integral part of IT and business life. So, too, are concerns about spending too much on cloud operations.
It’s easy to overspend on the cloud, says Elizabeth Ebert, CIO advisory partner at IT and management consulting firm Infosys Consulting. “Companies that are overspending on cloud resources tend to be the ones that are managing cloud infrastructure in the same manner they managed on-premises capabilities,” she explains. Ebert suggests that IT leaders should tailor their governance models to monitor provisioning and spend so that the monthly consumption bills don’t include unexpected costs. “The acquisition and release of cloud resources needs to be monitored as the key driver of costs,” she advises. “Savvy IT organizations are leveraging the cost management tools provided by the hyperscalers, as well as third-party capabilities, to continuously monitor these patterns.”
Organizations typically run into issues when they lack financial transparency and don’t have the necessary financial forecasts and controls in place before building or moving anything to the cloud, observes Alicia Johnson, consulting principal, technology transformation, for business advisory company EY. Some common issues arise when organizations don’t track IT expenses in a way that enables breaking out costs to support analysis or forecasts at an application or portfolio level. It’s also important for organizations to have a clear understanding of current state capabilities and performance. “Without it, engineering workload performance can be a challenge,” Johnson says. Also remember that consolidation delays can result in funding two environments in parallel. “Optimization is essential to ensure the efficient consumption of all cloud resources,” she notes.
Assess, Modernize, Optimize
Rishi Kulkarni, senior director and cloud native lead at business and IT consulting firm Capgemini Americas, suggests adopting a three-stage approach to cloud service procurement. “Assessment involves building a business case that incorporates overall total cost of ownership [TCO] and maps business goals with savings from cloud adoption,” he explains.
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