Tag inertia

Tag inertia

The Challenges of Establishing the Financials for a Cloud Project

Tags: , , , , , , , , , , , , , , Assess, Business, CIO
photo credit: wwarby via photopin cc

photo credit: wwarby via photopin cc

All the technical cloud evangelists are going to hate me for dwelling on the practical financial matters of establishing a cloud project but I am afraid these issues cannot be ignored. If organisations cannot break the deadlock on the problem of first man in or last man out with an sensible approach to managing allocation of costs, then the organisation will be in danger of missing out this critical technology revolution.

In case you have not read my earlier posts, or in case it was not clear, then let us take a real worked example of the challenges faced by a typical organisation in transition to the cloud. Smaller, more nimble organisations may not face this issue so starkly, but certainly the medium to larger ones will.

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Structuring IT Project Costs

Tags: , , , , , , , , , , , Assess, Cloud, Strategy
photo credit: kevin dooley via photopin cc

photo credit: kevin dooley via photopin cc

In my last post I hinted at the dilemma of who covers the costs for a cloud project. There would appear to be few issues and some major advantages to scaling out to the Public Cloud, as you can pay as you go or pay for what you use. But is this really the case? The problem with transitions to any shared platform is that nasty subject of who pays. Typically organisations will allocate shared service costs with an allocation key for the costs to various groups using the shared service. This allocation key will determine how much each person pays. It is obvious that as the shared service grows the unit price will trend downwards and will eventually level to a free market unit price but the first or last user may for an interim period pay much higher prices.  This “first man in” or “last man out” problem causes all sorts of grief for projects in the real world, not only for cloud but for many wider IT projects.

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