David McCann, CFO Magazine
July 15, 2010

Private cloud

The Private Cloud is just the next evolution, where turning up a server is a matter of minutes VS days or weeks, it reduces cost by maximizing resource utilization and a price savings being passed on to the client. As far as data protection and disaster recovery, Private Cloud can provide even more security in this area....Data Security as far as firewall protection is the best in the industry, with protection from denial of service, packet sniffing and intrusion detection, most issues come from customer changes to policies that unprotect themselves.
The Private Cloud will move into the health care Industry with little fan fair or publicity growing leaps and bounds, storing X-rays and large files that most facilities would have a large time trying to keep up with the storage needs. There are still "Server huggers" out there that want to go look at their equipment, however the cost of technical people to run all this technology will win out in the end as doctors move to the private cloud.

Posted by Donald Trojan | Jul 19, 2011 7:03 AM ET

The need for DR

Thought the article was excellent however one thing that was not discussed was the need for diaster recovery in the private cloud. in working with my clients I constantly here the need to be in a SAS 70 data center as well as the need for DR.

www.onlinetech.com

Posted by Donald Trojan | Sep 28, 2010 7:51 AM ET

Great article

The article touches on a number of core issues for CFOs. Part of the challenge is how to get the right level of understanding of current and future IT spending. The Gartner reference that "in 2000 Global companies less than 10% of CIOs understand their costs" matches our experience. I haven't yet seen a similar survey for CFOs but from our experience it is probably no higher than 10%.

We have found some other common themes in companies of all sizes:

1. IT costs are not just in the IT department. CFOs need to sharpen their Charts of Accounts so these costs consistently visible. This is becoming more of an issue as the definition of what is IT and what is, say, production control gets more blurred.

2. Predicting where IT costs are trending is too vague and requires getting better data on vendors and where their costs are going. These predictions and vendors must be challenged. Even though IT is now a big ticket item it often drops between the cracks where supply chain leave it to IT to become professional vendor negotiators.

3. Understanding the risk profile of the IT portfolio. A high risk decision today could bite for years to come. Risk here doesn't just mean basic issues like security and service levels, it means a myriad of cost issues such as the cost and effort to retrain the workforce, the impact on market share as well as the dangers of having unsupported software. Probably the biggest financial risk is the time to get projects done. We all remember the mega delays and cost overruns of so many ERP implementations of the 1980's, some lessons were learned from that but the same mistakes are still being made. The move to the cloud could be a repeat.

4. Setting priorities using an ROI approach. Finance, IT and Supply Chain still don't talk the same language here. Behind the scenes we hear CFOs admit that they really don't understand enough about an IT topic and yet they are being asked to approve multi-million dollar projects and investments. Likewise, many CIOs are weak on the basics of such things as ROI. It's time both parties made the effort to understand each other better before clouding further decisions.

5. Cleaning up as you go. Surprisingly, as new IT stuff gets implemented there is still a lack of attention to cleaning up the old stuff. In many organizations it is possible to find 10% - 20% of real waste. The moral here is to do better housekeeping before moving to the cloud or any other outsourcing arrangement.

Ray Barratt
President & CEO, Brivea LLC

Posted by Ray Barratt | Aug 6, 2010 5:50 PM ET

Roadmap and ROI

Great article David. I'd like to add that the companies that are most successful at leveraging the cloud to improve their business performance take the time to build a roadmap to the cloud with a business case that supports it. And when that roadmap is aligned with a company's business strategy, then success can be even sweeter.

We've found in our work with our clients that the potential business benefits from moving to the cloud are typically multiples of the cost savings that can be achieved. These are usually derived from not only from increased productivity but also from the ability to innovate and adapt business processes. These last two are usually enhanced by the public cloud, where companies benefit from the innovations of their cloud platform providers without making any additional.

Roadmap or not, however, most are finding that the rewards of moving to the cloud are difficult to ignore, especially compared to the risks of being outmaneuvered by a more nimble, cloud-enabled competitor.

Posted by Mark Koenig | Jul 27, 2010 10:41 AM ET