Achieving Cloud ROI – A How-To Guide

Grazed from ITWire. Author: Beverley Head.

Established in the 1960s, ISACA (formerly known as the Information Systems Audit and Control Association) has released a guide to help organisations work out what the true return on investment will be from investments in the cloud.

According to the organisation there are hidden costs associated with cloud computing which need to be considered when assessing the benefits of cloud.

The guide which is available as a free download details a 12-step process that attempts to tackle the complexity of cloud computing and provide better insights regarding long-term costs and payback. It also makes the point that return on investment is not the only financial measure of success (or failure) and recommends organisations also consider calculating total cost of ownership, net present value and internal rate of return data before committing to a cloud investment…

The guide however notes that a simple financial analysis may not fully represent the benefits of cloud. As it states; “The cloud promises a range of benefits that include the ability to shift cost from capital to operational expenses, lower overall cost, greater agility and standardisation, the ability to shift IT resources to higher-value-added activities, improve employee satisfaction and competitive advantage. Some of these benefits are quite subjective and, therefore, are difficult to include in financial (mathematical) calculations.”

Although ISACA points out the limitations of attempting to justify a cloud investment purely by ROI calculations it does note that proper financial analysis is still required.

“According to hype, the cloud is an opportunity for users to self-service all their IT needs, with virtually no up-front investment, minimal pay-as-you-go operating costs and limitless scalability, while all the hassles of managing data centres are almost magically abstracted away. The marketing is slick and makes it seem effortless.

“The reality varies somewhat.”

The ROI guide to the cloud follows ISACA’s release a year ago of its IT Control Objectives for Cloud Computing: Controls and Assurance in the Cloud, intended as a series of guidelines to help organisations mitigate risk associated with a migration to the cloud.

Download the free guide here: http://www.isaca.org/Knowledge-Center/Research/ResearchDeliverables/Pages/Calculating-Cloud-ROI-From-the-Customer-Perspective.aspx