In theory, enterprises collaborate across multiple business units; all stakeholders communicate regularly, and all departments work together to solve challenges that affect everyone. In reality, a lot of organizations have departmental silos and communication can be sparse or non-existent. When it comes to cloud expense management, these silos (especially between IT and finance) become even more apparent.
However, as IT services grow more complex and expensive, the silos become a blocker to true collaboration. Budget shrinkage and a contracting economy make it even more challenging. In order to understand and control your cloud investment, department silos must come down.
Versatility vs. Cloud Expense Management
In the not-so-distant past, IT departments owned and managed their own physical data centers for storage and computing power. They were responsible for keeping everything up and running but the process was very manual. Tasks like backing up servers, load balancing, installing upgrades and updates, and managing licenses fell on their shoulders.
This manual way of doing things was upended with the advent of cloud computing. Enterprises turned away from data centers and embraced the nearly limitless storage and computing capabilities that the cloud makes possible. With cloud, there’s no server to manage or reboot, no cooling systems to maintain, and no physical storage to augment. If a company needs to expand its storage capacity, it’s as simple as clicking a button and scaling up.
Although the promise of savings drives many to make the switch, cloud expense management can be fraught with challenges. With every great advantage of cloud, there comes a cost. And lots of them. To the tune of $62 billion, according to Business Insider.
Bills, Bills, Bills
The ways you can use the cloud are infinite; however, every single use has a cost associated with it. Many cloud vendors price their cloud services based on estimated capacity ranges instead of exact usage. This means that most companies end up paying for capacity that they aren’t using. Bulk storage “discounts” are also problematic, giving the often-times false sense of saving money. The truth is that bulk storage locks companies in to a certain amount of capacity; more often than not, they don’t use it, wasting money in the process. Moving data out of the cloud and onto the public internet for analysis, reporting, and/or sharing can also be costly. Although cloud providers let customers upload their data for free, the costs associated with downloading that data can vary widely.
Paper in Fire
Effortless isn’t always good and the cloud’s inherent simplicity can be deceptive. It’s all too easy to add new applications and allocate extra space for new projects or pilot concepts. It may feel like everything is going well — until the invoices come in. Cloud invoices are notoriously complex and can run to thousands of line items. Invoices often change from month to month, with different pricing structures, new line items, and ever-expanding costs. Forecasting is also a nightmare, for both the IT and finance departments. Although fixed fees tend to be normalized, the amount of consumption charges that can accrue in a month are impossible to accurately forecast.
All these issues make cloud expense management fraught with peril. It’s even more challenging when the functionality and need of IT runs into the fiscal prudence of finance. Blowing through a cloud budget is fairly routine and easy to do. Solving this problem requires breaking down the walls; this means better communication and more effective workflows between the IT and finance departments.
Bridging the Divide
Tearing down the silos between the IT and finance departments requires skill and patience. The two departments speak very different languages and have priorities that seem, on the surface, to be competing. IT wants the very best technology assets available to enable innovation, while finance wants to keep costs down. Having an outside mediator can often help alleviate the disconnect and provide optimization for both usage and spend.
Two Become One
With decades of experience and in-house cloud expertise, Tangoe can bridge the divide between your IT and finance departments. Two different languages and data sets become normalized with our cloud expense management platform, allowing both departments to maximize their investments. You’ll be able to analyze technology spend, accurately allocate costs, and identify opportunities to optimize usage and save money. The platform’s automation and analytics capabilities provide baseline data for a comprehensive audit of cloud spend, capacity need, and resources being used.
Translating Cloud Expense Management
But, it’s not just about providing the data to make these decisions. Tangoe’s experts also act as translators between the two departments. This ensures that everyone understands each other and is on board with a plan for cloud expense management. For example, IT needs time and resources to perform audits, run reports, and understand where usage is growing. The finance department, on the hand, needs cloud expense data allocated by certain business rules to understand and control cloud costs. These rules must be based on how the organization’s finance systems work.
The cloud expense management platform pulls all this disparate data and standardizes it across all vendors and projects. Even if some of the data is missing, the platform can run rules to fix it and format it within vendor portals. This makes it readable for the finance department, so they can understand the different costs while giving IT the information needed to manage the cloud from a technological perspective.
By bridging the communications gap between the two departments and making cloud expense management understandable to both, Tangoe’s experts and platform provide organizations with the resources they need to get the most out of their cloud while maximizing their investment.
To learn more about how Tangoe’s cloud expertise can help your organization facilitate better communication and collaboration around cloud expenses, schedule a product demonstration today.