Even though Cloud may be a relatively new phenomenon for your company, you can still begin to measure your return on investment (ROI) if not in real numbe, at least in the ways it is changing your organization. Here are a few examples.
More new opportunities become viable. First and foremost, the IT investment to support a new product is greatly reduced. IT resources can flex with a project—robust during development, then reduced, then scaled up as a product takes off. From a business plan perspective, this means the Number-of-Sales-to-Breakeven is lower, and the Time-To-Breakeven is sooner.
Likewise, lower IT costs mean your Pricing Structure can have more flexibility and/or better margins. Because the IT resources to support each new sale is a known cost—rather than a “best we can tell” allocation of blanket IT costs—Profitability-Projections are more reliable. Finally, no Point-of-Diminishing-Returns exists where IT hardware and staff are max-ed out and a CapEx infusion is needed for future sales.
The time between approval of a project and the start of work is shorter. Provisioning the resources takes less time. No more waiting for a purchase order to go through before the servers can be delivered, installed, configured and integrated. As sales escalate, the elastic and flexible cloud environment provides the needed support in perfect step with your product’s success.
A Cost Transformation
Long after you have garnered cost reduction from the move to the cloud, you will benefit from the way cloud computing aligns IT costs with revenues. Consequently, more business plans can meet your criteria as viable product opportunities.
What previous business ideas would pass profitability requirement in your company if you used cloud computing?
Download SunGard’s white paper, “All clouds are not created equal.”