Why does the CFO prefer cloud computing? When should CIOs stop?

CIOs should be aware of the specific reasons that CFOs are inclined to cloud computing. Many CIOs are exposed to the CFO mania for cloud computing, and presumably know why the cloud computing solution is cheaper. Also, cloud computing can translate it costs (a significant portion of the financial table) from upfront capital investment into expenditure items in the actual operation.

According to a recent survey by Forrester Research Inc., financial managers have shown the most intense interest in cloud computing solutions, or even more than two groups of people who can benefit from cloud computing: Business leaders and application developers.

"The CFO's favorite is the feature of cloud computing services being stopped, which can be adjusted according to the business cycle." They intend to gain the initiative to adjust. "Forrester vice president and senior Analyst (focus on infrastructure and operational dimensions) James Staten said.

Dennis Hodges is a CIO at the Inteva Products LLC (a supplier of car skylights, door locks and other components, headquartered in Michigan Troy), whose introduction to the cloud computing model was preceded by a two-term CFO (formerly known for cost control, While the incumbent is standing at a strategic level to view it input) the unanimous praise. Hodges first introduced cloud solutions in ERP systems and WANs, and soon transformed financial integration tools. Inteva is a heterogeneous company in a long history of enterprises, in 2008 began the old SAP system stripping work, the process lasted 15 months. The new ERP system resides in the public cloud (delivered in the form of service), which saves a great deal of upfront investment and subsequent operational costs. In contrast, the old ERP system, which was originally planned to complete the upgrade this year, will result in 10 million of dollars in input, including new system maintenance personnel.

"Everything is different now. We don't need to be equipped with developers, infrastructure operators, and disaster recovery systems. All of this is handled by the cloud service provider. "Hodges said.

But he quickly added: "As many legacy systems are abandoned, we are at the heart of the business applications and systems." ”

Let CFO correctly recognize cloud computing metrics and solutions

Staten that CIOs with many legacy systems on their opponents should stay sober before the CFO's obsession with cloud computing. CIOs should communicate fully with the CFO to really understand where the latter is interested in cloud computing. And be able to make it right when cloud computing is not appropriate for the enterprise environment.

"The biggest challenge for CIOs is to explain to the CFO where cloud computing is not a good place to use." "Staten said.

Not all cloud services offer the flexibility and billing characteristics that CFOs expect. IaaS (infrastructure as a service) and PAAs (Platform-service) are usually billed on a per-usage basis, while SaaS (software as a service) is typically charged by the number of users, and is 12 months in a single sign. "This is difficult to achieve with the purpose of stopping," Staten said.

Irv Rothman, chief executive of HP's financial services company, headquartered in Murray Hill, New Jersey, believes in the revolutionary changes that cloud computing brings to it and business. But Rothman also admits that the current accounting standards for cloud computing are too cumbersome for many CFOs, especially for CIOs.

"Most CFOs may have learned about cloud computing from magazines and then thought they could use it resources just as they would pay for electricity," he said. It is clear that this cannot be done at present and may never be possible. "Rothman said.

Instead, most companies will retain a hybrid environment for a long time, with traditional data centers and new cloud applications. "The CFO can no longer focus on the data center as much as before, and must invest in both." "Rothman said.

The elasticity and intermittence of cloud computing

Staten that in order to demonstrate the cost characteristics of cloud computing, it is necessary to select an application scenario with flexible or intermittent requirements. For example, an online store is a good starting point because it has a high demand for dynamic extensions and a great change in the number of visits to different times of the day. An enterprise that does not have to pay for the cost of shipping because of the Web store's access load is very attractive to investors.

"If the operating cost rises only when sales are rising, it means that each sale is more profitable," he said. This is what the CFO likes to see. Staten explained.

The intermittent nature of the application is that it does not need to be running all the times, and BI (business intelligence) applications are typical examples. Most businesses run BI applications only at the planning strategy stage. The quarterly summary of related systems is another example. "These applications are ideal for the cloud, run when needed, and then stop immediately," he said. "Staten said.

As a counter example, SAP's ERP system cannot have the flexibility to scale on demand. "This is a huge and always running system. "Staten said. To allow users to get the economics of cloud computing, SAP and other traditional ERP vendors have developed modules to improve system resiliency and flexibility to start and stop. However, this requires the upgrade of the ERP system, which means a certain amount of upfront investment. "This kind of investment will be very big. "Staten thinks.

For CIOs, system consolidation and virtualization used to be a common tool for reducing IT costs. But both are time-consuming. Cloud computing and outsourcing are a viable way to spend time and money. Outsourcing is very common in the enterprise's IT model transformation, but the traditional outsourcing model will lead to long-term cost investment. In contrast, cloud computing can provide the flexibility that traditional outsourcing does not have and reduce operational costs. Staten that CIOs should at least introduce cloud computing in areas with positive financial implications.

(Responsible editor: Lu Guang)