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ROI and cloud: Is your business maximizing its potential?

Craig Tavares

January 22, 2019

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If a primary objection of your cloud strategy is cost savings, moving a few workloads to the cloud in a piecemeal fashion likely won’t give you the returns you’re hoping for. And if you don’t do your due diligence to understand how user seats and data transfers will impact your monthly bill, you can end up with sticker shock.

Looking at cloud as a ‘journey’ toward achieving specific business goals can help you better measure the return on your investment — both quantifiable and qualitative.

Understanding the ROI equation

While the CapEx versus OpEx debate is part of the ROI equation, there are other factors to consider, such as revenue opportunities related to increased agility and time-to-market. It’s why cloud should be part of a well-planned digital transformation strategy, not just a way to shave a few dollars off your OpEx budget.

Determining cloud ROI has become more complex, in part due to the abstract nature of cloud — not to mention ‘soft’ benefits that are more challenging to measure. So if that migration is meant to transform your business, how exactly do you ‘measure’ the benefits of that transformation?

Don’t just consider the cost of your pay-for-use subscription. Moving to the cloud may involve certain ‘sunk’ costs. For example, you may need to train IT staff or hire cloud talent, and you may need to work with a partner to integrate your cloud-based applications into your overall IT infrastructure.

Quantifying the qualitative benefits

When determining your return, don’t just consider cash savings. Cloud, along with hybrid IT, is part of a larger move toward digital transformation (think Uber versus taxi companies, where technology has fundamentally changed the business model).

Consider that cloud will give you access to the latest and greatest technologies. Cloud providers have the scale to research, pilot and invest in new technologies that will directly benefit their clients — so their competitive edge becomes your competitive edge. And their technology is constantly being updated in the background so you don’t even have to think about it.

You’ll also benefit from increased security. Consider how much money (and time) you want to spend securing your data — then consider the ROI from offloading that responsibility to a cloud provider.

The same goes for backup, redundancy and disaster recovery. Consider the cost of doing it in-house, versus the ROI from offloading that to a trusted partner who can provide fast backup and restore times from secure, redundant data centers.

Getting more from your internal teams

Perhaps most importantly, take into account how you can more strategically use your internal resources. IT staff can focus on those higher-level strategic tasks, rather than keeping the lights on.

Employees can use the agility of cloud applications to test new ideas, enable faster prototyping, enhance collaboration, roll out new products and services faster, quickly respond to customer needs and even take advantage of emerging technologies such as artificial intelligence. With cloud, the sky is the limit.

There isn’t a simple mathematical formula for determining cloud ROI. It’s a complex process that depends on your specific business requirements. Working with a trusted partner can help you determine metrics for measuring your organization’s quantitative and qualitative ROI based on goals — and recognize successes as you move through the cloud journey.

To find out more about your cloud options, and how Cogeco Peer 1 can help you on your journey to digital transformation, download ‘The Business Leader’s Guide to Digital Transformation in the Cloud’ here now.


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