Exploring the Benefits of Cloud Computing

This article has been contributed by Chris White, Vice President - Global Competency.

Cloud computing is an essential element of modern business strategy. Organizations globally are slowly recognizing the positive ROI that cloud operations can provide for their company. We believe that companies with a clearly defined cloud strategy focused on business outcomes and cross-functional governance structure are more likely to realize the value and return on their cloud investments. In this article, we will share our perspective on how companies can enable their cloud strategy and drive business outcomes.

According to the State of Cloud 2023 report, 94% of leaders use cloud services for their technological initiatives. Nevertheless, there's a difference between simply using cloud services and truly harnessing its power to positively impact business outcomes and outperform competition. The report also reveals that, while cloud adoption is widespread, most organizations still struggle to operationalize cloud computing as a strategic advantage.

This gap between cloud adoption and strategic cloud utilization highlights the essence of developing robust cloud competency within organizations. Cloud competency goes beyond technical knowledge—it includes aligning cloud initiatives with business goals, optimizing costs, and driving innovation.

Benefits of Cloud Competency

1. Scale and Flexibility

One of the major advantages of cloud competency is the ability to scale rapidly and flexibly in response to developing business demands. For example, a B2B shopping marketplace often witnesses increased foot traffic and purchase volumes in certain seasons. Therefore, strong cloud competency can help the organization proactively plan and optimize its infrastructure to handle boosted demands—ensuring that the online business doesn't crash during peak periods.

A cloud-equipped organization can:

• Quickly expand or contract its resources as per the need
• Take advantage of new business opportunities by rapidly deploying new services
• Optimize its costs by scaling down during low transactional periods

2. Timeliness and Operational Efficiency

Cloud competency enables your organization to identify and solve problems in real-time, significantly reducing downtime and improving overall operational efficiency.

The State of Cloud 2023 report highlights that only 61% of organizations can push out new codes to consumers more than once per month. Cloud-competent organizations that focus on driving business outcomes are more likely to develop support models that are proactively managing cloud operations that result in:

• Reduced downtime through rigorous DevOps and testing strategies to minimize disruption from unplanned events
• Product-centric delivery models that are best positioned to continue to enhance as well as be responsive to shifting demands on cloud operations
• Efficient decision-making models that reduce time-to-market in response to support business demands enabled by cloud

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3. Cost Optimization Through FinOps

Financial Operations (FinOps) is an important aspect lacking in most organizations. It lacks effective governance models, resulting in many organizations overspending on cloud services. Organizations that embrace FinOps principles in their cloud governance models are far more likely to maximize the value of their cloud investments.

The State of Cloud 2023 report indicates that 71% of leaders expect their cloud budgets to increase over the next 12 months. That investment will grow exponentially as companies adopt AI as part of their operational capabilities. These increased investments necessitate implementing strong cross-functional governance models that focus on directly linking cloud investment and priorities to company objectives. 

Leveraging FinOps to Drive Value Realization

To massively gain value from your cloud investments, your company should focus on the core elements of FinOps:

1. Clear understanding of business objectives and capabilities that translate to KPIs to prioritize cloud investments and value realization
2. Visibility and allocation of cloud costs
3. Optimization of cloud resources in alignment with driving KPIs
4. Continuous improvement and automation driven by ongoing spend analysis and KPI performance

By developing competency in these areas, your company can gain the most value from cloud investments while avoiding unnecessary expenses.

Establish a Strong Governance Structure

If you believe that cloud competency is entirely about technical skills, you are only half correct—the other half is dedicated to establishing the right governance structures. The State of Cloud 2023 report reveals that only 20% of organizations have defined cloud policies, a cloud disaster recovery plan, cloud SLA policies, and cloud governance.

Developing competency in these areas enables your company to ensure that cloud initiatives align with business objectives and comply with regulatory requirements.

A strong governance structure should include:

• Clearly defined roles and responsibilities
• Policies for cloud usage and security
• Disaster recovery and business continuity plans
• Regular audits and compliance checks

The Path to Value Realization

Companies that understand the importance of strategy and governance are far more successful in maximizing the benefits realized from their cloud investments. Furthermore, companies must continuously assess and re-prioritize their cloud investments to maintain responsiveness to shifting business priorities.

To walk on the path to value realization through cloud competency, your organization should:

1. Develop a comprehensive cloud strategy aligned with business objectives
2. Invest in continuous learning and development for both technical and non-technical staff
3. Implement robust FinOps practices to optimize cloud spend
4. Establish strong governance structures to ensure compliance and risk management
5. Regularly measure and report on cloud-driven business outcomes

By focusing on these areas, your organization can transform its approach to cloud computing from a tactical necessity to a strategic advantage—driving innovation, efficiency, and competitive edge.

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