How Can You Measure a Cloud?How Can You Measure a Cloud?
Return on investment (ROI) has been a common performance measurement tool for companies for decades. However, now it’s come to the attention of numerous companies that perhaps a new variation of ROI will be needed to accompany the arrival of cloud computing. From this piece over at Forbes: “A new survey of 350 senior IT executives finds 16 percent see measuring ROI as a hurdle to their cloud computing implementations”
April 4, 2014
By Michael Brown 1
Return on investment (ROI) has been a common performance measurement tool for companies for decades. However, now it’s come to the attention of numerous companies that perhaps a new variation of ROI will be needed to accompany the arrival of cloud computing.
“A new survey of 350 senior IT executives finds 16 percent see measuring ROI as a hurdle to their cloud computing implementations”
Traditional ROI is based upon the hard monetary return on the purchase and use of products or services. However, the long term gains from the cloud are not always so easily calculated in a purely financial way.
Such long term gains which are unable to be measured by using a traditional ROI formula:
Process changes can be made more easily since there is no need for back-end programming systems
The ability to quickly and cheaply spin up servers to conduct tests on new ideas
Enables employees to move forward quickly with new ideas
Makes it unnecessary for companies to go through the tedious process of budget approval
Greater flexibility to react to changing market conditions
These benefits of cloud computing are not easily measured in terms of finances, but in a more abstract way. It is hard to argue that corporate flexibility and quick adaptation is not a huge benefit, but also quite difficult to place a dollar value on. The cloud enables a company to move quickly and perform jobs seamlessly, but simply cannot be quantified by traditional ROI methods.
Storing and distributing data with the click of a button, the agility needed to gain momentum ahead of competitors, unified employees collaborating from across the globe and increased protection and security of important data; these are some of the more intangible benefits of cloud based computing. The ROI on them is huge, but often numberless. Formulating a new system to more accurately measure the benefits in relation the cost of cloud computing is what companies are or will be focused on as cloud computing continues to increase in popularity.
How does your company measure the ROI on less tangible benefits of cloud computing and file sharing? Is there a need for an entirely new ROI system in regards to the cloud? Be sure to share your thoughts in the comment section.
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