Making a Case for A Cloud Migration to Your CXOs
As your firm's IT Manager or Chief Technology Officer, you may be tasked with evaluating and directing the strategic technology initiatives at your firm. Unfortunately, this doesn’t always mean that you have the final say on how and when your firm makes technology-related decisions. That responsibility, in many cases, falls to the Chief Operating Officer or Chief Financial Officer, and in many cases, that individual does not have a technology background. It’s up to you, then, to ensure you provide your CXOs with the right information to make an informed decision about your firm’s technology foundation.
To assist in this process, lets walk through some of the primary considerations senior management (C-level execs) will weigh when evaluating a to the cloud.
Cloud Migration Drivers: Is Cost Always the Primary Factor?
Many CFOs feel the best way to justify a new technology to non-technical senior management is to provide a sound and logical cost comparison. And when it comes to the cloud, yes – cost is a big factor and a serious selling point.
It’s much easier to explain and forecast when your technology costs scale predictably based on metrics such as number of users, storage, servers, and bandwidth demands. This eliminates both the feared step function in capital expenditures when a firm hits a certain threshold, as well as limits the pain of hardware refreshes to manageable items like workstations, laptops, and monitors.
Despite the significant cost benefits of the public cloud, a CFO is likely not going to sign off on a cloud migration unless it’s the right fit for the firm. Low-cost services can be attractive, but they also come with disadvantages, such as:
Lower service levels
Less security, resiliency and monitoring
Less customizable; unlikely to support custom application needs
Not built for your firm or industry
Focusing on Cloud Security and Compliance
Security is a real concern, and all financial firms should be aware of the threats within the industry and the potential effects of a security breach – both financially and in terms of reputation. Not only are regulators taking notice of security practices, but investors are also, making it more important than ever to ensure your firm selects a cloud provider you can trust. As a CFO, COO or senior management team member, you should look to understand the security practices in place on both a physical and virtual level as well as the policies and procedures in place to protect those assets. Organizations should also look at factors such as cybersecurity insurance, written information security plans and incident response procedures.
Armed and Ready: How to Convince Your CFO
CFOs, by nature, are driven by numbers, therefore, when pitching them on a move to the cloud, it’s critical to come prepared with hard data. You should be able to show the cost differences between what the firm pays now for IT vs. what would be expected on the cloud. CFOs will also want visibility into other effects the infrastructure move may have on the company, including staffing (will headcount be reduced?), reporting (will we gain more insights into our business?) and more.
Your CFO or COO is also going to see that you’ve done your due diligence before proposing this transition. Come prepared with cost comparisons and pro/con lists. However, cost isn’t everything. You’ll need to find a partner that you can both work with and one that fits your technical and business needs.
Outsourcing Makes Sense for Many Firms
When evaluating outsourcing, firms focus on what they're good at and outsource other areas to reputable third-party providers. Technology is a critical component of daily operations, but it is not what most investment managers would consider a core competency. There may be cases where it makes sense to maintain an IT staff in-house or manage aspects of your technology, but there are also equally compelling cases for outsourcing to augment or supplement IT and to gain specialty expertise and support.
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