Jon sinks into your dental chair, writhing from a toothache. You don’t start drilling unless you know the precise cause of pain, right? While the first likely culprit is a cavity, you don’t assume anything. You don’t ignore other possibilities – abscess, gum disease, teeth grinding, or even a slug in the jaw.
This reminds me of trying to find ROI of cloud computing. It’s not as straight ahead as simply calculating the cost difference between your on-premises IT (including data center infrastructure and management, licensing, labor…) and Cloud IT.
While few people in the Cloud, if any, deny that cloud computing saves money… how many know how much they’re saving? Oh, there will always be those who claim they’ve done their due diligence and know the ROI. But…do they really?
How do you Measure True ROI on Cloud Computing?
Despite the evidence, demonstrating dollars-and-cents returns from cloud investments can still be a challenge. IT leaders may be able to talk about the benefits of scaling on demand, the advantages of managed backup and security services, and the boost to employee productivity.
But not all can point to a hard figure that proves not only savings, but actual revenue gains. Particularly as a direct result of their cloud investments.
If tying cloud spend to concrete business gains is challenging for your practice, it’s probably because you’re stuck in an old IT paradigm. IBM hasn’t weathered over a century of computing by operating the same way they did in 1911. They’ve evolved their business, marketing, and technology strategies with every decade.
The cloud disrupted every business process. So you’ll need to update your metrics for ROI on cloud computing to reflect the new cloud paradigm.
What Does It Take to Look Beyond The Number Crunching?
What does your practice need to thrive and compete with the big names? Can you list three skills, capabilities, or transformations that would enable your reputation to rise to the top of the industry? Those are your unique Cloud ROI metrics.
Consider, for instance your business perspective. A single new dental practice works with an entirely different set of KPIs and infrastructure than a long established multi-location practice heavy on its own infrastructure.
But if you just compare the price tag of Cloud services to on-premise IT infrastructure, you miss the bigger picture. Look at how cloud computing benefits business processes, innovation, security, employee and customer value, and more.
So defining the Cloud is really about defining its value to your business.
To know your Cloud ROI you need to go beyond a narrow cost comparison and look at business benefit metrics. Factor in the value of the new business opportunities and the competitive advantage that Cloud affords practices of every size.
3 Winning Returns On Your Cloud Investments
Though it’s no secret that each dental practice is unique, there are some returns that everyone can benefit from. To help you start thinking differently about your cloud investments, and how you measure their returns, I’ve outlined 3 Winning Cloud Returns:
- total cost of ownership optimization
- business agility gains
- improved security and compliance
These business-benefit measures can be used to create a scoreboard for your current and future IT deployments.
1. Total Cost of Ownership Optimization
Advantages are gained by switching from a capital expense (CAPEX) model to an operational expense (OPEX) model. It’s the total cost of ownership (TCO) that leads to OPEX optimization. But what is TCO, anyway?
First, I’ll tell you what it is NOT – the purchase price of IT equipment or your monthly Cloud services payments. It’s all of the direct and indirect costs of “acquiring, commissioning, operating, maintaining and disposing of a product or system.” The price tag on a server is only a sliver of its TCO.
You’ll get more control, with TCO optimization, over your IT spend. Optimize performance, integration, maintenance, and management of every piece of equipment, software, or service you use.
Cloud computing minimizes upfront investment and maximizes revenue, margins, asset usage, reliability, performance, and security. What’s more, true TCO compared to on-premise IT means savings on:
- Energy costs: Servers consume lots of electricity, running up an average bill of $731.94 per server, per year.
- Equipment replacements: The average business replaces its on-premise systems every 5 years. That’s about $6,190.00 per server for new hardware, software, and labor.
- Downtime: One survey found that downtime costs $26.5 Billion each year.
Your budget will be freed up to put more resources into pursuing new patients and markets — giving you a competitive advantage that’s hard to put a number on.
2. Business Agility
The Cloud lets your practice operate more like the dentist of your childhood because it’s far simpler and more affordable when it comes to:
- scaling up
- adding and removing services
- adapting to a changing competitive environment
A key business benefit of the Cloud is the ability to change, adopt, and eliminate services. Even change service providers with ease.
This ability to make changes without incurring costs and downtime is business agility. An agile practitioner is fast, precise, and nimble. An agile practice gives you the ability to grow quickly and effectively.
3. Improved Security
Imagine the freedom you’d feel if you never had to worry about malware, viruses, spyware, and all the rest ever again. And the statistics don’t lie:
- On-premises IT suffers from far more attacks as service provider environments.
- Attacks are often from within. “Almost 58% of organizations that had cloud security incidents over the year blamed them on insiders.”
- The 36% less downtime of cloud computing translates to greater patient retention and loyalty–a Cloud ROI boost.
- Managed security can provide the best tools, 24/7 monitoring, and access to security experts at a lower cost than hiring in-house IT.
Outstanding Cloud ROI
Beyond these 3 winning returns, the cloud computing ROI is invaluable for its mobility, flexibility, scalability, productivity, and more. And just as you’d look far beyond simple cavities for the cause of Jon’s toothache, looking far beyond cost comparison is needed to reveal a true picture of cloud computing cost savings.
Contact us today to get more facts about how to measure true ROI on cloud computing.