The CFO's role in the cloud question

This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

Cloud computing will affect everything in your organization -- right down to the bottom line. For the CFO whose job centers on managing risk, what happens to your organization's data in the cloud is directly relevant to your role in the organization. Yet, many CFOs, and even their CIO counterparts, don't hear about some cloud deployments until after they're rolled out.

Research from the IT Policy Compliance Group reports that 54% of organizations surveyed do not know how many cloud computing projects are underway in their business. The ease and instantaneous ability to turn on cloud apps is leading to deployment without IT, legal, internal audit, and information security involvement, resulting in new and unanticipated risk to the organization. In some cases, the only way these organizations find cloud services operating is after finance identifies orders and payments from invoices.

Network World - This vendor-written tech primer has been edited by Network World to eliminate product promotion, but readers should note it will likely favor the submitter's approach.

Cloud computing will affect everything in your organization -- right down to the bottom line. For the CFO whose job centers on managing risk, what happens to your organization's data in the cloud is directly relevant to your role in the organization. Yet, many CFOs, and even their CIO counterparts, don't hear about some cloud deployments until after they're rolled out.

Research from the IT Policy Compliance Group reports that 54% of organizations surveyed do not know how many cloud computing projects are underway in their business. The ease and instantaneous ability to turn on cloud apps is leading to deployment without IT, legal, internal audit, and information security involvement, resulting in new and unanticipated risk to the organization. In some cases, the only way these organizations find cloud services operating is after finance identifies orders and payments from invoices.

RELATED: 5 signs that you've lost control over your cloud apps

This means that not only were the risks not evaluated, but the change in accountabilities was likely not considered. For enterprises to fully realize the benefits of cloud computing and minimize the risks, CFOs must be involved from the start when determining how cloud computing can best serve the organization.

Cloud models provide multiple benefits, including elastic consumption, elimination or dramatic reduction of capital expenditure, self-service, and pay-as-you-go pricing. In many cases migrating to the cloud eliminates capex and replaces the upfront costs with predictable and manageable opex. When cloud resources are maintained outside of the business, CFOs can shift form managing an asset in a fixed manner to managing a service, which is an operational cost.

In addition to capital savings, maintenance costs may be reduced by adopting cloud computing. The cloud provider maintains the service and performs any necessary upgrades, freeing the customer from the additional man hours IT staff would require to keep up an on-premise deployment. [Also see: "Cloud-onomics 101"]

It's short-sighted to view this as an opportunity to further reduce operating costs by lowering head count in IT. CFOs that see the big picture recognize the opportunity the cloud presents to redeploy IT staff to work on more strategic projects that will have a direct impact on the business and can improve the bottom line -- developing competitive products or improving productivity. This transition lowers the risk associated with strategic IT projects and keeps business agile by allowing for more experimentation and innovation.

Beyond the direct financial gains, there are other advantages which, while less directly tied to revenue, still provide operational advantages. In business, where one day can mean the difference between leading the market and lagging behind competitors, cloud computing offers the advantage of speed. Whereas purchasing, testing, and integrating new hardware and software components can take weeks or even months, cloud-based solutions can often be deployed in a matter of hours. This flexibility also allows for real-time response to needs as they arise.