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Who should be crafting my cloud budget?

IT plays a crucial role in planning and tracking cloud budgets. But should my business and finance executives also have a heavy hand in the process?

How should IT and non-IT teams plan cloud budgets?

Unlike traditional IT budgets, cloud budgets are a team effort. In fact, there should be three business groups involved in cloud budget planning: business management, IT administrators and finance experts. To achieve the best cloud outcome and budget, each faction needs to communicate and collaborate.

Business managers should drive the discussion because the service -- whether delivered on-premises or through a service provider -- should meet a clear business need. Business leaders should also spearhead the testing and evaluation of prospective services

Meanwhile, the finance or executive group approves cloud expenditures. To determine whether a capital or operation expenditure is the best payment approach for the services, this group also uses financial analysis concepts, such as net present value (NPV) or cost-benefit ratios.

Lastly, the IT staff must assess whether the current infrastructure is ready for cloud service integration. This group makes any necessary upgrades or changes, and will liaise with the cloud provider to ensure smooth integration. Typically, IT also monitors and manages ongoing cloud performance.

For example, a business group decides to use big data analytics to identify sales opportunities. Following the model above, business leaders would drive the big data discussion, and likely consult with IT about implementation options. A business could deploy hundreds or even thousands of servers and storage to process big data tasks on-premises. However, the finance group, along with C-level executives, might want to avoid the necessary capital expense for such a deployment. Additionally, IT may lack the necessary staff or expertise.

Rather than deploy the analytics on-premises, the company could choose big data cloud services, such as those from SAP, IBM or Oracle. In this model, the company only pays for computing while analytical tasks are actually performed. The company can scale back or turn off unnecessary computing resources. Cloud services, as a result, can make big data projects more affordable and less complex.

Cloud services might seem like a strike against IT, but they actually have a positive impact on in-house IT teams. Third-party services also include third-party support, eliminating IT's burden of daily "firefighting." This, in turn, allows IT to devote more time to mission-critical applications and strategic, long-term projects.

Ultimately, cloud budget planning is similar to all IT budget planning; the goal is to understand and control costs, while maximizing business productivity and value.

Stephen J. Bigelow is the senior technology editor of the Data Center and Virtualization Media Group. He can be reached at sbigelow@techtarget.com.

Next Steps

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Budgeting for cloud and how to spend precious dollars

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This was last published in March 2015

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Using cloud for budget planning makes sense, but surprises me that big companies like IBM or Oracle don't offer a trail of cloud budgeting.
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