Cloud Computing and SOA Convergence in Your Enterprise: A Step ...

76 Chapter 4 Making the Business Case for Clouds
In essence, this is a list of business and IT issues we can potentially address
with cloud computing. Again, the types of issues you use for your business
case may be very different depending on the business and IT issues
within your enterprises.
Step 2: Assign Costs
Now that we know the issues, we need to assign costs. These are typically going
to be over a 1- or 2-year horizon, but some companies will want a 5-year
horizon, depending on how they do the planning. This part of the business
case is really about assigning cost to the defined issues, thus creating the case
that there are things that can be improved, and here is how much we will
benefit if we improve them.
Considering our example, we could assign yearly costs as follows:
Business
Customer satisfaction is low due to lack
of good sales automation processes.
Sales projections are inaccurate, thus
causing projected sales to be overstated
and understated.
IT
Existing hardware and software costs
are not in alignment with best
practices.
Numerous system performance complaints
are made by sales staff.
Sales staff is forced to share terminals
because of scaling limitations from the
existing systems.
$500,000 in lost sales per year
$750,000 in the cost of poor
reporting per year
$1,000,000 in hardware/
software costs per year
$200,000 in the cost of lost
productivity per year
$300,000 in the cost of lost
productivity per year
Some of these costs are based on gathered data, others are estimated, and
some are a mixture of both. Make sure that the cost of each issue is not inflated
but is based on reality. Keep in mind that this business case will be reviewed
at some time in the future and therefore should reflect the “real
world” as much as possible.