“The cloud” has become one of the hottest buzz terms. Initially of interest primarily to IT executives, the cloud has expanded into the realm of human resources and finance. It’s critically important, therefore, that Chief Financial Officers become familiar with the cloud and its potential to deliver true benefits to an organization.
Savvy CFOs are perpetually on the look-out for ways to increase agility, speed innovation, and reduce costs. The cloud has the potential to deliver on all those fronts. Yet, the vast majority of CFOs possess little more than a rudimentary understanding of cloud computing. That prevents them from initiating conversations about the cloud. Only when the CFO possesses a thorough understanding of this transformational technology will they be empowered to make smart decisions and maximize the benefits that cloud can deliver for their company.
Let’s begin by defining cloud computing. Originally dubbed “software-as-a-service,” the cloud refers to dynamically scalable remote computing services provided by a third party. Users don’t need to understand all the details of the computing infrastructure. Nor do they need to be concerned about the underlying technology and where or how their data and applications are stored. All they must do is connect via a few easy-to-use interfaces. Information residing on the cloud can be accessed through a web browser and an Internet connection. Users can even access information via mobile phones and laptops.
A true game changer, cloud computing has the potential to reduce IT and business costs. It is incumbent upon the CFO, therefore, to gain an appreciation for how a cloud strategy can influence the organization’s cost structure and financial strategy. If they don’t, they will be unwittingly forfeiting a significant competitive advantage.
When it comes to evaluating the financial benefits of the cloud, users typically experience lower capital expenditures. However, financial professionals have begun to recognize the cloud as a strategic way forward, not merely a means of reducing costs.
CFOs will be interested to learn that the cloud represents new frontiers for risk and governance. They have the opportunity to take the lead in creating a framework for managing emerging governance and compliance issues. It’s important to note that CFOs are responsible for vetting the viability of cloud providers. The CFO must assess a cloud provider’s ability to safeguard the data residing in its systems, for example.
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