Top 5 Ways to Measure Cloud ROI

all investments undertaken in business improvement, investing in cloud computing, or the technological change affected by the convergence of new and existing technologies, is one whose benefits and Return on Investment (ROI) must be measured.

As with all investments undertaken business improvement, investing in cloud computing, or the technological change effected by the convergence of new and existing technologies, is one whose benefits and Return on Investment (ROI) must be measured.

Cloud computing is characterized by some technical aspects:

Infrastructure capacity is not locked into devices or location.
Application and information access can be obtained from any access point.
IT service is on a pay-as-you-go basis; i.e. you only pay for what you use with little to no up-front investment costs. Typically, the service is used through a connection and device.
On-demand service with near-instant availability. This grants you the ability to scale up or down with no forward-planning forecast required.
Cloud computing enables ‘infinite capacity performance’ that is the same if scaled for one hundred or one thousand users with consistent service-level characteristics.

Amazon Web Services popularized a graphic depicting the Capacity Versus Utilization Curve that has become an icon in cloud computing. The model illustrates how cloud-based services are enabled through an on-demand business provisioning model to meet actual usage.

This model is most valuable to businesses. One of the fundamental precepts of cloud computing is to avoid the cost impact of either over-provisioning and under-provisioning of computing resources. You get what you need and pay for what you use. Besides the opportunity for cost, revenue, and margin improvements enabled by the rapid deployment of services at low entry cost, this is a much sought-after benefit.

However, demonstrating cloud computing’s ROI to the business requires more than capacity and utilization metrics. People have developed a set of key considerations for how to build and measure ROI for computing initiatives from a business perspective. Computing for ROI makes it easier to gain stakeholder ‘buy-in’ for cloud initiatives when the benefits to the organization and the potential return it can provide are examined and presented.

1. Business skills and capability improvement

Cloud computing enables access to new skills and solutions through cloud sourcing on-demand solutions. Cloud security tools, for example, improve the businesses capability to protect its data, identify possible threats, and prepare contingency measures to prepare for worst-case scenarios and data breaches.

2. Enhanced capacity utilization

Enhanced capacity utilization. Because cloud computing tools are usually on a pay-as-you-go basis that allows you to simply pay for what you use, IT gets to avoid over-and under-provisioning of IT services to improve smarter business services.

3. Rapid provisioning

On-demand resources can be scaled up or down to follow business demand activity as it expands or is redirected. Cloud subscription packages are priced according to the number of users in an enterprise that needs access to software, for example, making this a highly flexible option.

4. Dynamic usage

Because real end-users and real business needs as far as functionality and scope of users and services are targeted, service management can stay relevant in providing just the thing to users in need of new solutions.

5. Increased margin and cost control

Because flexible cloud computing solutions enable businesses to scale their operations in a more cost-efficient manner, they often observe an increase in revenue and a decrease in extraneous expenses. This paves the way for customers and markets for business growth and service improvement.

Conclusion

These measures can define the new set of indicators that create your new scorecard for determining return on investment for your cloud computing initiatives. Ultimately, it is up to your business to evaluate cloud computing opportunities and focus on how aspects like flexibility, overall competitive advantage, and compliance risk and security entailed by cloud adoption can be better defined in business language.

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