While many managers can answer the question “What is cloud computing?” or even “What are the advantages and challenges associated with the cloud?,” they struggle to make a compelling business case for it.
As a manager, how do you articulate to your CIO and CFO the value that cloud computing will bring to your organization specifically?
Knowledge@Wharton and SAP spoke with Erik Berggren, vice president of customer results and global research at Success Factors (an SAP company), and Don Huesman, managing director of the Innovation Group at the Wharton School of the University of Pennsylvania to determine the value that cloud computing presents for businesses.
Erik Berggren points to the improved agility of cloud computing as a top value delivered. By replacing on-premise applications with cloud applications, you enjoy the benefit of increased speed, moving from years to days. As your businesses becomes much more agile at implementation, you receive greater scalability, allowing you to scale up or down quickly. For example, entering joint ventures, transitioning into a new market, or integrating applications across the whole organization become easier and faster processes. For businesses that compete in an environment of uncertainty and in high-growth markets, agility provides tremendous value.
In addition to greater agility, cloud computing results in lower costs for businesses of all sizes. Costs are not only reduced, but also become more transparent and predictable. With cloud computing, the organization essentially pays for what it needs when it needs it, following a pay-per-use model. Thus, cost transitions from a large capital expenditure that must be amortized over time to a variable operating expense. Cloud computing also eliminates expensive maintenance issues that cost the IT department time and money to fix. This is extremely appealing to organizations.
Arguably the most compelling advantage of cloud computing is its impact on business execution. Cloud computing helps businesses execute and improve strategy, as well as increases productivity, driving innovation. Berggren says, “When you see improvements in productivity and innovation in addition to efficiency and doing things faster and cheaper, that’s the real value.”
The benefits that businesses can expect from cloud computing are vast, including providing organizations with the edge they need to outcompete competitors. As managers increasingly recognize the business value of cloud computing, they are beginning to encourage their CFOs and CIOs to exploit the advantages by developing a cloud strategy.
Watch the full interview with Erik Berggren and Don Huesman on the business value of cloud computing here.
SAP and Knowledge@Wharton are collaborating on a project on cloud computing, one of the fastest-growing areas in IT today. They invite you to watch videos with experts at SAP and Wharton discussing this trend and to take a short survey. Participants in the benchmarking survey will be eligible to win a Kindle Fire and also receive a copy of the results. Complete the survey by clicking here.