In Protiviti’s most recent Finance Trends survey, more than half (58%) of the respondents said they plan to increase their spending on cloud applications in 2020. Considering this number includes those who are contemplating migration or have already migrated to the cloud, the adoption of these technologies is not just a possibility but rather, a reality.
For many, the business drivers to utilize cloud technologies was built on a few basic premises – availability, accessibility, modernization and of course, decreased cost. Although these outcomes are all achievable, organizations have realized the ability to specifically demonstrate and produce cost savings is easier said than done. The ease of cloud resource deployment, the use of many different types of resources (some more expensive than others) and integration of automated resiliency features marks a shift from the traditional annual capital expenditure budgeting to the need for robust ongoing operational expenditure monitoring and governance processes.
To ensure the adoption of cloud technologies produces cost savings and expenditure transparency, consider the existence of the 5 C’s: collaboration, configuration, clarity, consumption and control. These processes reinforce governance development, process design and communication across teams:
Collaboration: Integration between IT and Financial Teams
Given the real-time operating model for cloud technologies, the annual budgeting process with reconciliation at the end of the year will only cause headaches for both IT and finance teams. Providing consistent reporting on existing and forecasted expenditure will allow teams to have transparency into the data needed for effective communication. Consumption dashboards that track resource spend to business projects or capabilities can foster communication and help organizations avoid a ‘where did we go wrong?’ situation at the end of the budget cycle.
Configuration: Cloud Resource Governance
The different types or levels of each resource available within cloud platforms can be a developer or architect’s dream. However, the level of each resource utilized can also become a budget nightmare due to traffic use fees or unpredictable usage. Utilizing configuration policies, access restrictions, thoughtful architectural standards and targeted resource monitoring, organizations can enforce guardrails on the levels of each of cloud technology utilized while maintaining compliance with configuration requirements.
Clarity: Current and Future State Expenditure Transparency
Each cloud platform provides users tools that will enable resource use transparency; however, they are not all the same and without the right configurations they can make it difficult to accurately answer a foundational question: ‘what am I actually using within the environment and am I paying for resources I don’t need?’ Ensuring resources are tagged appropriately, de-provisioned accurately and fully monitored against an up-to-date inventory are a few foundational processes that enable an organization to answer this question and better forecast and validate expenditure.
Consumption: Real-time Monitoring and Alerting
Configuring resource use requirements and access policies, and defining guardrails within the organization enables proactive transparency. In order to fully understand or identify areas for cost savings, organizations should validate their use of real-time monitoring and alerting tools within and outside of the cloud platform. This will provide insights for specific areas of improvement and allow teams to reactively draw attention to a specific resource use that may require remediation before it goes unnoticed.
Control: IT Access Restrictions
The accessibility of cloud platforms when restrictions are not in place allows organizations to adopt a less centralized method for resource provisioning and enable teams to essentially create their own environment within the cloud platform. Although this approach provides freedom and the potential reduction of admin time, it also can create negative implications for expenditure. Much like establishing policies for resource configuration types, implementing technical controls such as service control policies and ensuring roles are provisioning using the least privilege methodology will lead to a reduction of resource ambiguity and provide IT further control over the utilization of the environment.