Many Finance folks are excited about cloud computing, and for good reason. The cloud can help businesses cut costs, increase flexibility and achieve other benefits. But a new survey says organizations may need to temper their expectations a bit.

Moving to cloud services often costs more than organizations expect and doesn’t always deliver the immediate benefits they had wished for, according to a recent cloud computing survey from consulting firm KPMG International.

While organizations’ top goal for adopting a cloud service is to cut costs (cited by 48% of respondents), 33% said the cloud computing project cost more than they’d initially planned for, according to the survey of 650 senior executives.

In addition to cost savings, businesses often turn to the cloud because it makes IT costs more predictable, since the costs of owning and maintaining equipment is replaced with regular subscription fees. However, cloud services are also scalable, allowing companies to buy as much or as little of a service as is needed — and 26% of businesses said that a lack of visibility into their future needs has made it difficult to make costs predictable.

After cost savings, the second biggest driver to move to cloud computing was the expected speed with which those services can be adopted (cited by 28% of survey respondents). However, some key challenges have made cloud adoption more difficult and time consuming than companies predicted:

1. 31% said integrating cloud services with existing architecture was difficult
2. 30% said avoiding data loss and protecting privacy was a challenge
3. 30% were concerned about losing control over their IT infrastructure, and
4. 26% said there is a lack of standards and interoperability between cloud computing providers.

Achieve the benefits of cloud computing

The good news: 70% of organizations said cloud services have delivered cost savings and improved efficiency, so the benefits are real.

But there are some steps companies can take to get more out of cloud computing:

• Keep expectations realistic — It’s important to remember that the cloud won’t completely eliminate the need for in-house management and maintenance. Initially, staff will have to spend time moving data and deprovisioning old systems, and managing cloud vendors and contracts will require ongoing effort.
• Test and prepare beforehand – It’s important to make sure everything will work together once a cloud service is adopted, and to find alternatives before a contract is signed and a service is implemented. Also, it pays to make sure the company has enough bandwidth available to handle the additional load.
• Protect data — When using a cloud service, companies need to make sure data is secure and that the organization is protected against data loss. That means using encryption and managing user access to protect privacy, and taking care of backup and recovery planning.
• Train users and IT staff — Anytime workflows are changed, there’s a chance that productivity will drop initially as users and staff get used to the new systems. Providing enough training beforehand can help reduce the impact.

Tags: cloud security, Cloud services, contracts, costs