This entry was originally published on the CloudSource Blog in November 2011
As you know, I have the opportunity to meet with CIO’s on a regular basis. Many of them start realizing the transformative nature of cloud computing. I have posted several blogs focused on the potential cloud computing has to radically change the IT and business landscape. So I was pleasantly surprised when I came across two compelling CFO Research surveys that demonstrated the level in which others in the C-Suite, primarily the CFO, are now getting involved. This is certainly welcomed news for a CIO community that has often struggled to articulate the business benefits cloud delivers in the financial terms CFOs understand. At HP we increasingly use the business value framework to identify the financial implications of innovative approaches such as cloud. I’ll leave that to another blog entry as I want to focus on the survey results at the moment.
According to the CFO survey, which interviewed CFOs at global corporations from around the world, CFOs widely acknowledge they can no longer afford to ignore the promise cloud provides — primarily faster, cheaper and more flexible access to computing power. However, the survey also highlights CFOs are unclear on how to turn the potential benefits of cloud into a reality. It’s an area that continues to mystify the business community in general and the CFO in particular. Although CIOs may have the answers to some of their initial concerns surrounding cloud, there is a larger opportunity to change the conversations they have with their CFOs from one focused on technology to one focused on business priorities. There was a great piece Bill Bulkeley wrote in CIO which explained CIOs should approach CFOs as partners, not supplicants, in the business investment decisions they make.
The move to cloud for most large organizations will be more of an evolutionary journey rather than a revolutionary one. In order for the journey to be successful, CIOs and CFOs will need to collaborate on developing a proactive and thoughtful approach to cloud that combines a technology roadmap with a financial one. Milestones on this roadmap can represent significant opportunities to improve IT and business performance.
For the skeptics out there wondering if IT and business can truly have a peer-to-peer relationship, I’d like to point them to the recent CFO research which clearly indicates it’s already happening, especially with the increasing reliance on technology like cloud to drive business value. One senior banking executive is quoted in the report as saying “the partnership between finance and IT has definitely gone up. While finance has always played a key role in IT and in defining investments, the importance of IT has increased and the partnership is more important than ever, with the emphasis on data accuracy and speed.” Actually the more IT becomes part of the business, the easier it becomes for IT to discuss with the business on an equal footing. Beyond the potential of more flexible access to compute power and cheaper approaches to running legacy applications, cloud allows innovative approaches to consumer experience, product/service integration, increased operational efficiencies and others. It’s up to the CIO to demonstrate these. That will allow him to earn his seat at the business table.
Organizations still taking a siloed approach to addressing organizational challenges need to reconsider their strategy or risk becoming obsolete in market that is rapidly adopting cloud and virtualized technologies to support their business needs with our without IT. Clearly having alignment on issues like cloud will be essential to having business transformation. It’s good to see that CFOs and CIOs are finally moving beyond the polarized discussions that once forced them to make tradeoffs between IT costs and business value. Now they can make decisions towards business alignment that effectively marries technology to business objectives.