There are many reasons organisations adopt cloud. These include exploring potential, building new applications, transitioning from legacy platforms or expanding existing capability, resilience, global reach. Whether cloud-first, hybrid, cloud-only, or multi-cloud organisations use different strategies for cloud adoption. Whatever the reason or strategy, from a technology procurement perspective most have  at least one thing in common, the transition from capex to opex. This has a number of implications that have an obvious impact on financial teams but should also filter down to technical teams. A failure to address the full breadth of these impacts will, at best, cause inefficient cloud use and at worst generate large cloud bills that jeopardise sustainability. We explore how finance teams can be equipped to maintain control and visibility whilst helping, rather than hindering, technical teams striving to innovate in the cloud.

Cloud is an investment in a technology platform to provide the functionality to serve a required outcome. Where traditional platforms typically required such investments to be considered on a 3-5 year term, cloud investments are far more dynamic. It is this dynamic nature that makes cloud an attractive proposition as it gives developers and organisations a far greater ability to adapt to the changing environment in which they operate. With longer-term traditional investments organisations built governance processes that could control technical design, validate them in the context of cost and organisational benefit and refine where necessary to strike the balance that met TCO and ROI objectives. These would be met in sequences of reviews with pre-defined checks and balances to provide the required assurances to gain sign-off from relevant stakeholders. These processes may have worked for the environment in which they were used but this does not mean they are appropriate for the more dynamic cloud world. If you apply controls of a similar nature in the cloud you cripple its ability to deliver the value that took you to the cloud. If you ignore them entirely you fly blind and accept all the risk that brings. In this context ignorance certainly is not bliss and increasingly the choice to evolve these processes is disappearing as a choice because competitors who do are disrupting the market so significantly that it becomes impossible to remain competitive. You need only look to Netflix and Uber as very striking examples of this.

The first step in this evolution is recognising the change in where technology investment choices are actioned. Costs in the cloud are incurred by technical engineers or lines of code that decide when to start and stop resources, they are not incurred on the back of a purchase order that has been signed after successful navigation of a sequence of assurance hurdles. The checks and balances of those hurdles need therefore to be adapted so that technical teams work with cost as an architectural principle just as much as functionality, security and performance are. To support them in this, financial teams should be able to add value to their technical colleagues by proactively highlighting factors that influence cost to incorporate in design and retrospectively challenge why decisions were made that do not necessarily represent the most cost-effective solution. The more dynamically this can be done the less redevelopment is needed to re-architect inefficient solutions and the lower the cloud bills whilst identifying and resolving such inefficiencies. 

At Strategic Blue we adopt a predominantly financial perspective to cloud adoption. We store the pricing available from cloud vendor pricing models to identify nuances such as regional or generational differences. We monitor price changes over time to identify trends on which to make recommendations for optimisations. We provide consultancy on “cost conscious design” to guide engineers in architecting efficient solutions which are also capable of reacting to the price and service changes to ensure they remain cost-effective over their lifespan. Our Clarity and Transparency tools help financial teams track usage trends and trigger notifications for spend anomalies to reduce inadvertent overspend risk and impact. We understand that finance/business and technical teams can appear to speak entirely different languages as they hold different perspectives and work to different priorities but in the dynamic cloud world they must be able to collaborate. Our tools are designed to account for this by helping teams surface the right questions to ask and providing the means through which they can be answered. Where necessary our Financial Solution Architects use their technical backgrounds to further bridge the gap between the technical and financial and ensure that our recommendations remain practical to implement.

We hope you found some of the information introduced here useful. We would welcome the opportunity to explore the detail of delivering this with you but you may also find the links below helpful in expanding upon the ideas introduced above.