Managing the Financial Side of Cloud Transitions

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The EDUCAUSE Enterprise IT Program helps institutions address the challenges and opportunities associated with defining and maximizing the value of enterprise IT services to the institution. We are examining four themes in 2016: effective sourcing strategies, costs and funding, analytics and business intelligence, and business process management. As we develop resources for each theme, you will be able to find them on the Enterprise IT Program website.

Our current theme is about costs and funding, with a focus on the financial implications of cloud technologies and services. A link from the Enterprise IT Program website takes you to the new page on understanding and defining costs and funding. It contains case studies describing two institutions' experiences and the lessons they learned about the impact of cloud services on their financial strategies.

As higher ed IT moves more and more services to the cloud, institutions are finding they need to reexamine their enterprise IT funding. Resources may need to shift to accommodate a move away from capital expenses to operating expenses, to create enough budget flexibility to address subscription service payments instead of one-time costs, and to include implementation and migration costs. There are cost implications for staffing as well, as different types of skills may be needed, requiring either training existing staff or hiring new staff to get the skill sets required for successful cloud migrations. It's also important to keep in mind that enterprise IT budgets need to evolve over time, requiring clear communication with institutional leaders to help them understand the need for flexibility and change in the IT budget.

The new web page about understanding and defining costs and funding provides access to a set of relevant materials—including research studies, working group papers, benchmarking data, and policy materials—to help you navigate the impact that cloud services will have on your budget strategies and spending patterns. You'll also find case studies that show the importance of a compelling business case, clear communication, effective governance, and alignment with institutional mission. Interestingly, these approaches echo similar ideas that emerged from last quarter's case studies about effective sourcing strategies, implying that these are important considerations for doing enterprise IT well regardless of the particular topic at hand.

We invite you to take a look at these new resources. Let us know if they're helpful. Send us your questions and your suggestions for improving them by contacting [email protected].

Betsy Tippens Reinitz is the director of the enterprise IT program for EDUCAUSE.

© Betsy Tippens Reinitz. This EDUCAUSE Review blog is licensed under the Creative Commons BY-NC-SA 4.0 International license.