ISACA’s newly released report, How Enterprises Are Calculating Cloud ROI, is a landmark piece of research that, in my opinion, validates the notion that we have reached (or are at least rapidly approaching) that tipping-point where organizations realize that moving their IT infrastructures to the cloud is an inevitable, foregone conclusion. The white paper documents the growing trend for organizations to forgo financial ROI analyses as a way to justify investment in cloud computing, instead resorting to intangible returns, such as better application performance, enhanced business agility and improved customer- and employee-experience (Cx/Ex).
But could there also be a more subjective reason fewer companies are performing ROI analyses? There definitely is a growing perception that forward-thinking companies are moving away from internally managed data centers and infrastructure. In many of my interactions with IT professionals from major, Fortune 500 enterprises, I have heard comments like, “To stay competitive, we’re moving all applications to the cloud; anything we can’t move will die in place … ” and, “Our board of directors is asking why we are not taking more advantage of the cloud.”
The age of digital transformation is demanding our attention and driving us to a foregone conclusion: we cannot continue to do it all ourselves. As IT professionals, we are asked to reduce costs, increase productivity, stay a few steps ahead of cyber criminals, support the needs of growing mobile workforces, accommodate hybrid networks, improve Cx/Ex, all the while improving network and application performance. Enterprises, and even governments, are also under pressure to appear competitively on the leading edge by outwardly embracing digital transformation. All of this cannot be accomplished by building on top of traditional IT infrastructure and management models.
The digital age is moving at such a fast pace there may be a general sense that there isn’t time for formal ROI rigor, or that the concept of due-care is taking hold, such that it is now considered irregular and imprudent to not migrate IT functions to the cloud. There was a time when office buildings had their own telephone switchboard operators, and textile mills and factories generated their own electricity. When the automated PBX and centrally distributed AC power emerged, it’s doubtful many organizations did an ROI analysis after it became obvious the old way was the wrong way.
ISACA’s new guidance on cloud ROI reinforces many of these notions. The habit of conducting formal cloud ROI analyses may be coming to an end as traditional IT gives way to the cloud.