Once you have implemented cloud for your business, be it migration or adoption, it is essential to keep changes in track. Be it total revenue or cash flow, there have to be regular checks about the functioning of the implemented cloud model and continually assess the working of it to engage in best practices and check its governance. The Key Performance Indicators related to the costs for the Cloud System are to be measured on a regular basis and altered based on their performance and business metrics achieved through the system. Out of all the Key Performance Indicators, the cost-related ones and finance teams associated with the cloud environment are key figures to assess the IT Spend and cost savings after migration to cloud infrastructure. Here, we explain the top three Cost KPI Parameters that help to gauge the cloud costs and associated cloud services to help you achieve business metrics.
Total Cost of Ownership of Cloud Environment and Tools
While calculating the total cost of ownership might be a scary task, it becomes vital when handling with cloud systems, related assets, infrastructure and tools to lead to the fulfillment of business metrics. The total cloud costs is the cumulative total of all the maintenance and functioning costs cloud related tools and resources being used for the IT infrastructure. The cloud costs from clod service providers come in mainly pay-as-you-go price models. Hence, the total prices for purchase, operation and maintenance would be the added value of all these assets during the time frame being used. The costs of cloud, unlike traditional costs, are calculated based on the time or duration of the use of the feature along with the price of each resource used. This is useful to know the cost of the tool beyond the initial purchase, making is easy to assess the Return of Investment for the Cloud Resources. Additionally, the key figures in total cost ownership during migration of the system would include the migration costs, the monthly maintenance cost and consultation and IT spend costs.
Cloud Computing Resources: Budgeted Forecasts vs Actual Spend
During the cloud readiness assessments, one can forecast the budgets for IT Spend based on usage for the cloud resources. But one must assess these spend after the implementation to ensure that the actual spend is at par with these budgets. Tracking the costs and key figures along with the utilization of the cloud resources help to plan the future spend and, further, think of inclusion and exclusion of several spaces of usage and running instances. These methods help to make amendments in the taxes and refunds based on the IT Spend. Additionally, the KPIs are calculated based on the seasonal demands of the customers to use the functions. This measure can help to stabilize the IT spend based on the usage of the resources and their scalability. The major flaw in this KPI calculation is when the small and medium-sized businesses leave out these seasonal fluctuations of the systems based on demand variations.
Third Party Support Tools: Budgeted Forecasts vs Actual Spend
While the actual spend on the cloud service providers is forecasted or calculated in the spend of the cloud computing resources, the third-party tools for data analytics and serve various workloads on the system are calculated separately. As much as the features and services used on the cloud platform are essential for the cloud, it is equally vital to think about the third party support tools and resources integrated with the system. Similar to the actual cloud computing costs, these key figures are budgeted during the cloud readiness assessments, and need to be kept in check to ensure that targeted costs meet the actual spend. Along with third-party tools, the support and training from the cloud provider and the cloud vendors are also part of this part of the spend. Hence, the metric must be budgeted and kept in check.
To ensure that the business goals are fulfilled over a period of time and ensure that the products are ready in time to market using the cloud technologies, one must keep these major cost-related KPIs in check and ensure that the cloud journey yields success to the business KPIs as well as those related to the cloud infrastructure. In order to ease out the business decisions on cloud, one must keep these cloud metrics in check. To set up your baseline analysis metrics, custom reports to measure key figures on cloud cost savings, cloud readiness assessments, or forecast your cloud success based on cloud usage, book a consultation with our CEOs now! Measuring and excelling in Business Performance on cloud is just a click away for business users in a faster time!