Why the CFO needs to be involved in cloud decision-making

In many organizations, the CFO is the common enemy uniting all business units, fairly or not.  In my role as a marketer, from time to time I am asked to speak to various marketing and advertising industry groups about improving the relationship between marketing and finance departments. I also see similarities for this needed communication with finance as a key requirement for IT as well; especially as it impacts any migration to the cloud. It seems finance really is in the driver’s seat. I imagine this is due to their historical focus on measureable metrics whereas such metrics are somewhat as new to marketing as it is to IT.  Finance issues simply get more visible as cloud computing interest rises, just like when scorecards received more interest from marketing a decade earlier. 

 

Coordination between the chief financial officers (CFOs) and the rest of the organization is critical.  For IT, this is nowhere more evident than when they seek to build a new cloud computing environment.

When transitioning to the cloud, decision-makers need to carefully consider their objectives. They need to determine consistent metrics to make informed decisions about:

  • When to move to the cloud
  • What applications to move to the cloud
  • How to work with business units in provisioning the cloud
  • How to transition from on-premises to SaaS or cloud deployments

    Defined as they are by their equal desire to maximize returns while avoiding risk, CFOs may be far more aggressive than IT in their desire to move forward (to lower cap investment and maintenance costs, or complicate matters for the CIO by moving too slowly (fearing any number real or imagined ‘what if’ scenarios).


A recent study by Deloitte Consulting indicates that cloud computing decisions require a cooperative working relationship between the CIO and the CFO. This is in their common interest not only because of the benefit to the organization, but also to each individually.

 

For the CFO, the cloud represents an opportunity to embrace and reinforce a corporate culture necessary to effectively adopt cloud or SaaS to achieve strategic and financial goals. For the CIO, this cooperation helps to elevate IT to a strategic partner in the future of the organization.

 

 As James Babb, a partner at Deloitte, commented in the report: “Aligning the various stakeholders is an important task for the CFO in partnering with the CIO to adopt a cloud computing environment in an organization”. He goes on to say, “In addition, a cloud computing environment will often allow a CFO to know better the true cost of the IT function where the running costs of applications are often hard to determine with precision.”

“Confidence in the Cloud” is a term I coined for HP Software as a Service. This confidence is as important now to the CFO as it is to the CIO.  A proven provider like HP SaaS, trusted by finance and IT alike, can help bring the CIO and CFO together and assure an effective and efficient migration to the cloud.

 

www.hp.com/go/saas

Labels: CFO| CIO| Cloud| finance| IT| SaaS
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About the Author
Jim is a technology marketer with over two decades experience in product launch, branding, and product marketing
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