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C-suite leaders are applying more scrutiny to cloud spending and migration efforts. Shifting your objectives towards creating cloud business value can help align management and operations.
Is the C-Suite putting the brakes on the cloud?
After years of dramatic cloud spending, there are signs of increased scrutiny within organizations. A study from late 2022 found that “81% of IT leaders say their C-suite has directed them to reduce or take on no additional cloud spending as costs skyrocket and market headwinds worsen.”
While the economy since then has fared better than expected – to the delight of IT budgets everywhere – a much more recent 2023 study found that “while nearly two-thirds of organizations have made strategic investments in cloud, fewer than one-third are realizing their ambitions” in terms of achieving desired business outcomes.
How can that be? Haven’t cloud migrations resulted in massive technical, operational, and financial gains for businesses?
In many respects, yes. For instance, according to a survey of 500 senior cloud decision-makers from a variety of US businesses, 72% to 88% of participants concur that cloud expenditures result in various types of competitive advantage.
So what’s the disconnect?
Priorities Drive Perspectives
While C-suite leaders may generally understand the potential benefits of cloud-based infrasructure, these benefits are not experienced the same by everyone. For example, in the survey above, data broken down by function indicates that certain business sectors perform better than others at utilizing their knowledge of cloud deployments.
Different perspectives are a result of different priorities.
For instance, Chief Information Officers (CIOs) want to ensure secure and reliable IT operations. That means worrying less about operational costs and more about actual operations (ensuring stability and scalability now and in the future).
A chief financial officer (CFO), on the other hand, is more concerned with controlling expenses and maintaining cash flow. CFOs may raise concerns about the cost-effectiveness of cloud technologies the CTO is hoping to implement.
When it comes to cloud cost optimization, every person in the C-Suite is set up to see and quantify cloud spending in different ways and to prioritize different goals.
Implementing effective and proven cloud services, no matter the budget, is likely to be a top priority for a CTO or CIO. On the other hand, the CFO or CRO may be more interested in creating predictability and imposing guardrails within cloud spending. Still others may have other primary hopes for what they expect cloud-based infrastructure to achieve.
Different Roles, Different Languages
Often, the same actions (like cloud initiatives) can advance everyone’s goals – they are not necessarily in conflict! But when different goals within the C-Suite are misunderstood by IT leaders and not effectively addressed, conflict is inevitable.
That’s how, for example, a major migration effort that improves the organization’s long-term outlook but racks up extensive budget overruns can get an IT Director or CIO fired.
So how can IT leaders advance important cloud goals in spite of the increased scrutiny coming from the top of many organizations?
Make Cloud Business Value a Shared Language
Effective leaders not only know how to understand and address the priorities of other stakeholders (like CFOs) – they also know how to orient their teams around those priorities.
In other words, they create a single language with which they can ensure buy-in from their own bosses and steer their team.
Consider that when cloud transformations stumble, it is often because of a negative business outcome such as:
- cost overruns and ballooning budgets
- siloed systems and inefficient infrastructure operations
- new security risks
In some cases, these outcomes might be inevitable. But does the C-Suite understand that these outcomes are necessary costs to achieve something that will save more money in the long run? Or do they view them as a resource drain for an IT pet project?
The difference is in the language used to communicate.
Similarly, some negative cloud business outcomes can be avoided with a team-wide philosophy that balances business goals (like operational efficiency and cost optimization) with technical requirments.
Of course, that’s easier said than done. What would this look like in practice?
How to Speak the Language of Cloud Business Value
For IT directors and cloud managers, the language of cloud business value starts with visibility.
According to a 2022 study, “only slightly more than 4 out of 10 IT leaders say they have visibility today into costs and consumption across their entire cloud environment.”
That won’t work.
While companies are likely aware of the total amount they spend on cloud infrastructure and services, they frequently have far less information on things like:
- costs by business unit,
- how those costs relate to revenue / customer acquisition & retention / other business goals,
- how much more the alternatives could cost in terms of long-term risks / diminished efficiency / etc.
Infrastructure teams can’t prioritize or effectively address overall business priorities without this kind of information (especially business unit costs).
After all, cloud costs are all but guaranteed to rise over time – it’s inevitable if your revenue (and data) is rising. Being able to measure things like cost-per-unit and opportunity cost shows the real story.
This is why FinOps has become a major movement within the industry. It takes the mindset of other departments (like finance) and makes it part of IT’s mindset as well – giving IT even more control of not only their spending but also the company’s overall success.
The good news is that organizations who can do this often find the proof for what they already know: cloud is improving their business.
A recent MIT report showed that 66% of survey respondents reported positive ROI from their cloud investments over the past two years. Organizations in the cloud are achieving success, so make sure you can measure it.
Enable Cloud Business Value with the Right Tools
With clearer vision into cloud business unit data, IT leaders can both achieve and prove business value from cloud initiatives.
But when organizations are increasingly adopting multi-vendor cloud strategies, that visibility will be harder – and even more important – to obtain. Otherwise, how will you know which vendor to use for which workloads, or if you’re actually achieving better overall outcomes?
That’s why Visual One Intelligence provides unified analysis across hybrid infrastructures, putting multi-vendor cloud, virtualization, and storage data all in one place. That includes:
- Chargeback / showback reporting
- Actual costs, waste, and savings for each resource and workload
- Cost comparisons for your workloads and resources to identify potential savings with other providers
- Projected spending (based on utilization) vs. actual budget
- Spending heat maps to identify resources that grow unexpectedly
- Capacity planning and usage forecasting to understand future needs
- Migration planning and optimization
The best part? Visual One is not just a cloud tool – it monitors and optimizes across your entire infrastructure.
If that sounds like it can help with proving (and achieving) cloud business value, check out a demo or start a free trial to see for yourself.
Either way, there is no better time to strengthen “business value” as an essential piece of your team’s philosophy. It will help you, your department, and your entire organization.
Visual One Intelligence™ is a suite of software-as-a-service (SaaS) products and services tailored to help IT Infrastructure professionals maintain and optimize cloud, compute, and storage environments. By consolidating independent data elements into unified metrics, Visual One Intelligence™ simplifies infrastructure management by illuminating cost-saving and operations-sustaining details that often stay hidden.
