In continuation to my earlier post on how can enterprises embark on the journey to cloud, customers need to understand the very important aspect of calculating the ROI for cloud computing projects.
Possible ways to calculate ROI for Cloud Project:
Conventional ROI calculations were not designed to capture the complexity arising due to new computing models like cloud. Moreover, in cloud economy, return on intangibles is as important as the return on tangible. An ideal method for calculating ROI in Cloud Computing would be the one which will measure incremental improvement and disruptive transformation of the business process.
Let us look at the complexity for calculating ROI in cloud computing model. One key parameter to lookout for is time dependency of a workload in cloud computing model. This means that for an active life of an underlying asset, it can be provisioned many times over. It is like a ‘hotel-model’ where guests check-in and check-out. An effective ROI model will be the one which takes into account over-provisioning in a cloud model.
Like I mentioned above, we must measure intangibles for calculating true RoI in cloud computing. For example, cloud computing injects agility into IT process. Therefore, we must have the ability to measure changes to the current and future process maps and put a business value around the impact that cloud computing has had on the process map.
In a nutshell, it is important that the current ROI model be beefed up to capture nuances of cloud computing model for a true reflection.