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10 Reasons Why Cloud Computing Will Assist with Growth and Recovery (Reason #4)

Break the Computer Productivity Paradox

When IT first entered the Enterprise, great leaps in productivity and competitive advantage was the experience.  Companies spent more on IT by bringing in more and more applications and the trend of productivity enhancement continued.  However, as business IT moved into the 1990s, the benefits of productivity, as it relates to a company’s annual IT spend, were waning and the Computer Productivity Paradox began to be reported

This Paradox, simply stated, is that the positive correlation between a company’s IT spend and productivity no longer existed.  IT transitioned into a cost center and by 2000 many IT analyst and economist state that the IT productivity benefit had hit the wall and was actually trending down.

Why is IT now failing to bring increasing benefits even while IT spend for many companies has risen?  The answer is found in the blinking lights an buzzing fans of a companies premise based data center.  Most U.S. companies find that 70%-80% of their annual IT spend goes towards supporting legacy systems.  With that large of a percentage of spend going to keeping the existing IT “lights on”, IT innovation can become the chief casualty.  In other words, at some point as a company added “boxes” and every thing that goes along with that, the scale has now tipped to supporting the “Old” instead of discovering and implementing the “New” that drives productivity and revenues.  With dollars disappearing into the black hole of general maintenance and upkeep, is it any wonder that innovations that drive productivity are not to be found.

Moving Past the Paradox

  • Uncouple hardware acquisition, implementation and support thus liberating resources to focus on software identification, development and support.
  • Move to a “Computing Utility” for on demand technology allowing for true strategic agility  as your company implements an agile and open model responsive to opportunity in the moment and without IT limitation.
By getting out of the “Hardware” business of IT, the Enterprise can focus on the true power of IT…the application. Through moving the management of the “boxes” to the Cloud, a company’s own IT resources can once again develop IT applications that drive revenue, solve business problems and keep customer loyal.
Wednesday January 16th please read (Reason #5 – The Crystal Ball and Bigger Fish)

10 Reasons Why Cloud Computing Will Assist with Growth and Recovery ( Reason #3)

Avoid “Big Check” Disappointment

Does this scenario sound familiar?

IT, either internal or a vendor, informs the C-Level that an upgrade/refresh/other type project needs to occur.  These projects can include items such as , server refresh, software upgrade, virtualization and storage…and the list goes on.  The C-Level agrees to fund the project and over the next days/weeks/months the project is implemented and goes off without a hitch.  The Monday morning after the project goes on-line and in production the C-Level turns on his/her computer and guess what…not one thing has changed in how he/she runs the business.  Yes, the core is perhaps more stable, or back-up is more reliable or the systems are more redundant and performing well…but has this investment driven the business forward?  Did it put into place applications that face the customer and makes the company more profitable…probably not.

A common reaction from the C-Level or business ownership to this traditional IT investment model is, “Why did I just spend this money?”  It’s a normal reaction when an IT project provides no perceived benefits or enhancements to the business of the day-to-day.  And when the economic downturn emerged in 2008, many companies went into survival mode.  Budgets reflected, and in many cases, continue to reflect the uncertainty of the U.S. business climate.  IT certainly was impacted by this natural reaction and therefore many businesses have some degree of deferred maintenance…and when refresh/upgrades/other types of projects reach the point of being a must…well the “Big Check Disappointment” moves to another level.

Imagine Refresh/Upgrade Into the Cloud

  • Advance to perpetually state-of-the-art data center with no “Big Check” required.
  • Liberate a large percentage of your companies normal annual IT spend for higher and better causes…such as driving revenues or entering New Markets.
  • Increase performance and security levels while at the same time saving money.
  • Reduce Power Cost – Reduce Tax Burdens – Gain Time Value of Money Benefits
Through a solid Cloud IT Strategy, a business can allow a business to high performing data center systems without the upfront investment of precious capital.  Instead a company can focus those resources on areas that foster real growth and increased revenues.  Today, the enterprise has the opportunity to have flexible IT resources, available on demand, often without single points of failure, leveraged in a way that allows the business real and necessary strategic agility

10 Reasons Why Cloud Computing Will Assist Growth and Recovery (Reason #2)

The Cloud is Key to Competitive Advantage

By removing the overburden of managing the “equipment”, IT resources can become liberated to focus on customer facing, revenue producing applications…not the boxes. Analyst covering the IT industry, as well as many economist studying workplace productivity, agree that IT must integrate themselves into the business units and focus on solving business problems through technology.  It’s hard to do that when the bulk activities are associated with maintaining/supporting the “boxes”.  Leadership within IT is beginning to see themselves as providers of services and solutions vs. providers of infrastructure or managers of networks.

When IT professionals are liberated to develop solutions and are not bogged down in supporting the “boxes, opportunity for real Competitive Advantage begins to present themselves.  If your company is liberating resources through the Cloud to be turned into customer facing, revenue generating solutions and your competition is not…well who wins that competition over time?

By lowering financial barriers and risk of trying new ideas or going after new markets, the collaboration between IT and business functions can work more closely as a tight unit driving towards Competitive Advantage and Growth.  In other words, the dollars and risk problems that stalled creativity can be removed by a sound Cloud Computing Strategy.

With the economic realities of the “New Normal” continuing in play, the best opportunity for growth for many businesses is coming from the creation of new product, services or new markets…Innovation as the Competitive Advantage becoming a priority.  Cloud Computing merits a good look as a lower-cost and strategically agile avenue for facilitating Innovation and Competitive Advantage.

The C-Suite, Competitive Advantage and the Cloud

  • CEO:  The flexibility of the Cloud provides real agility that allows the business to take advantage of opportunities from wherever and whenever they emerge while freeing resources to innovate and engage the customer.
  • CFO:  Positive financials at both the top and bottom line of the business; the Cloud moves IT spend from Capital to Operational providing a path for investments to more closely align with actual revenues.
  • CIO:  Cloud design principles of on-demand resources, elastic and dynamic usage based cost, removes the “IT Limiter” of quick innovation leading to the capturing of Competitive Advantage.
Real World experiences with Cloud Computing are producing innovations that help user move into new markets, launch new products and services, while providing survival tactics for tough economic times.  Cloud Computing  was a key component that set the opportunity for these activities into motion!
Monday the 14th will be Reason #3: Avoid the “Big Check” Disappointment and Reason #4: Break the Computer Productivity Paradox