In a multi-cloud world, IT and Finance must work together to create an effective ‘control plane’
Spend now, pay later.
In a multi-cloud world where computing resources are available and scaleable on demand, this approach is a recipe for cost overruns and budget deficits. It isn’t like the old days of on-premise data centres, when the need for more capacity or capability involved reasonably predictable deployment cycles for new hardware and software that could be budgeted in advance.
Back then, it was like planning a wedding reception for so many dollars per guest (prime rib costs too much, let’s go with the chicken). Today, it’s an al a carte drive-thru menu, where everything from soup to nuts is on offer.
Left to their own devices, project managers with deadlines to meet and critical needs to address (like security and backup) are bound to prioritize convenience over cost and consume whatever resources are available. We’ve all heard the horror stories of cloud sprawl and cost run amok.
The right governors need to be in place.
Not just the MSP’s problem
Anthony Spiteri, host of the Great Things with Great Tech (GTwGT) podcast, used the term “control plane” during his chat with our CEO, Alan Zurakowski, earlier in the year (check out GTwGT Podcast Episode 12). They were talking in the context of an MSP looking to grow in a multi-cloud marketplace, but there are considerations on the client side, too.
Ensuring an effective and appropriate control plane is in place isn’t just a matter for the enterprise’s internal IT team. Ownership of it must belong just as much with the internal finance team.
Both teams must work together to rethink and remake the traditional approval/review/reconcile/optimize processes model for IT spending. A cloud environment demands something more flexible and rapidly adaptable, considering how usage patterns within the organization can shift from day to day and vary between departments.
COVID-19 has only accelerated this need for change and cross-departmental cooperation.
Gartner summed it up in a November cloud usage report:
“The pandemic validated cloud’s value proposition,” said Research VP Sid Nag. “The ability to use on-demand, scalable cloud models to achieve cost efficiency and business continuity is providing the impetus for organizations to rapidly accelerate their digital business transformation plans. The increased use of public cloud services has reinforced cloud adoption to be the ‘new normal,’ now more than ever.”
Gartner forecasts that the proportion of IT spending that is shifting to the cloud will accelerate in the aftermath of COVID-19, with cloud projected to make up 14.2 per cent of the total global enterprise IT spending market in 2024, up from 9.1 per cent in 2020. Double digit gains will continue to be seen in all areas: SaaS, PaaS, IaaS and so on.
“The COVID-19 pandemic forced organizations to quickly focus on three priorities: preserve cash and optimize IT costs, support and secure a remote workforce, and ensure resiliency,” Nag added. “Investing in cloud became a convenient means to address all three of these needs.”
The two sides of the control plane
How can finance departments ensure a growing reliance on the cloud continues to serve these priorities within their organizations, without cloud usage itself becoming a cost centre?
This control plane has two aspects:
First, internal processes still based on that old IT procurement model must change to adapt, with new policies and procedures better suited to manage and ensure accountability of cloud usage and spend.
Second, the enterprise should expect that its service providers have the tools and processes to help rationalize and reconcile cloud usage, even in a multi-cloud environment, to drive cost-efficiency and, equally important, deliver accurate billing at month end. Who better within the enterprise to own that relationship than the finance department?
In a multi-cloud world, it’s not just the IT teams of the service provider and the enterprise client who must always be on the same wavelength, but the finance folks in the back offices of both organizations, too.