When discussing the value of cloud outsourcing with financing, IT leaders should highlight the benefits such as speed, reliability and security.
The division between IT and finance can be challenging in budget planning. While opinions differ within IT budget planning, they can escalate further when discussing the potential of outsourcing cloud hosting. In practice, many finance executives believe it’s cheaper to manage IT environments and resources in-house rather than outsourcing to public or private cloud providers, but this doesn’t factor in other elements like speed, reliability, and security. The benefits can be hard to determine, in terms of financial gain, but the competitive advantage cloud providers offer with secure and scalable infrastructure is valuable.
The risk of cybersecurity
When talking about the benefits of cloud outsourcing, safeguarding IT systems from the threat of cybercrime are a priority. The truth is that all companies face a potential risk of cyberattacks, and the costs can be significant. As of this year, the global average cost of each data breach exceeded $4 million, and according to the World Economic Forum, cyberattacks have increased by 125% since 2021.
The importance of reputation
Aside from the issues of damaging data and disruption to productivity and business activities, reputational harm is a concern. When sensitive customer data is exposed, businesses can experience significant harm to their reputation, which ultimately impacts their financial gains. Studies have shown that customers care deeply about data breaches and how organisations manage their information and security. The Ponemon Institute reported that 65% of data breach victims lost confidence in a business due to a data breach.
High security provided by cloud providers
As shown by studies, cyberattacks can result in substantial costs. Most businesses want the highest level of security, something that cloud providers can offer. Cloud providers invest significantly in high-level security systems and staffing to ensure their customers remain safe. Another benefit of on-premise services is the segmentation from user platforms. Outsourcing cloud hosting enables businesses to create safeguards as their users aren’t operating on the same network.
Significant investment is required for in-house hosting and will require maintenance and possible replacement in the future. The initial expense can be challenging for many companies to absorb, which leads to the benefit of cloud outsourcing. Rather than invest thousands in purchasing and maintaining in-house equipment, cloud outsourcing offers predictable costs for budgeting.
Cloud outsourcing supports businesses to compete effectively through added reliability, scalability and speed. Many cloud providers have invested time to ensure high uptime for their service, creating a higher level of reliability that makes a business more attractive to customers.
The ability of cloud providers to readily increase cloud capacity ensures businesses can remain agile and makes the process of growing more accessible and faster. Instead of investing time and money to acquire more systems, changes to cloud capacity can happen instantly.
The volume of data and storage capacity managed by cloud providers exceeds a typical company resource. Cloud providers also have quicker connection rates since they have the resources to afford better bandwidth and speeds. A faster connection means quicker speed-to-market for customers.
The benefits of cloud outsourcing may be challenging to quantify, but discussing the long-term benefits with finance leaders, including security, scalability, reliability and competitive advantage, are difficult to ignore.