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Advice and Information for Finance Professionals

Cloud Migrations Impact the Top Line, Too

Joyce Boland
Vice President, Applications Global Marketing

In our last blog post, we described how relying exclusively on straightforward financial considerations such as return on investment (ROI) and total cost of ownership (TCO) to decide when to transition to cloud computing can be risky. But if these traditional criteria are no longer enough, what can business leaders do?

The answer is to calculate the impact of cloud migration on the business as a whole. As a paradigm shift, cloud computing can have a positive impact on revenue, security, productivity, market share, and profitability. When companies consider the full breadth of advantages, the true value of digital transformation via the cloud becomes clear—as does the opportunity cost of postponement.

Cloud keeps you competitive

Many companies may be holding on to their outmoded technology simply because it has not reached its end of life based on initial calculations of ROI or TCO. But the risk incurred in delaying the transition can be substantial. Given the rapid change that cloud computing facilitates, the opportunity to catch up with your more technologically advanced competitors becomes more remote the longer you wait. In this highly competitive environment, the obsolescence of legacy systems is accelerating beyond the rate of depreciation and other basic financial calculations. Consider this: Customer expectations are growing daily, and your cloud-driven competitors can respond far more quickly than legacy on-premises systems allow you to.

True calculations of ROI and TCO should account for the full business value of a cloud migration. These include anticipated revenue from cloud-driven products and services, increased security, ongoing productivity growth from continuous upgrades, and shifting IT resources from maintenance to innovation. Similarly, these calculations should include the risks associated with postponement: security vulnerabilities that could result in risk and costs associated with a breach, as well as loss of market share to nimbler, cloud-enabled competitors.

Become a technology leader in the cloud

Once your organization embraces cloud migration as the foundation of digital business, new opportunities for revenue, productivity, and innovation arise. You’ll be able to take advantage of rapidly evolving technologies that flourish in the cloud, such as artificial intelligence (AI), machine learning (ML), blockchain, and the Internet of Things (IoT). Taken together, these technologies can help your organization leverage data to open as-yet unanticipated opportunities.

This is exactly what is happening in the healthcare industry. Faced with growing costs and an expanding workforce, the industry’s productivity has slowed. In response, industry leaders are seeking ways to improve clinical outcomes for defined groups, such as patients with diabetes, while controlling costs. Forward-looking healthcare providers, payers, and policymakers are applying predictive analytics and machine learning to analyze huge volumes of data on patient health and spending to identify the most cost-effective interventions. Without the data capacity, computing power, and access to emerging technologies enabled by the cloud, these measures would be prohibitively expensive or even unavailable to organizations that need them.

Advanced analytics aside, companies can reap benefits in terms of efficiency, security, and productivity by migrating core business and customer-facing applications to the cloud. Doing so would drastically reduce the capital expenditure on IT, make their solutions scalable on demand, build in best practices for common business processes, and shift IT personnel and resources from routine maintenance to strategic initiatives.

Fully understanding the impact of a cloud migration means factoring in the true business value that comes along with it.

To learn more, read the full research report.

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