According to a new survey of CIOs by global technology association ISACA, 32 per cent of organisations do not calculate the return on investment (ROI) of their use of cloud computing.
ISACA’s latest research report, How Enterprises Are Calculating Cloud ROI, discusses the financial and nonfinancial benefits of calculating ROI. According to the survey, enterprises that do not calculate ROI are justifying their cloud investments based on nonfinancial criteria, such as enhanced business agility and shifting funding from capital expenses to operating expenses.
Of the 68 per cent that do calculate ROI, 43 per cent only calculate it before implementing cloud services, and 6 per cent only calculate it afterward. Only 52 per cent of those that calculate ROI do so both before and after implementation, to see if actual ROI aligned with anticipated ROI.
“Just a few years ago, about 20 per cent of organisations did not calculate ROI, according to industry surveys. In 2017, that percentage has increased 12 percentage points,” said Ed Moyle, Director, Thought Leadership and Research at ISACA. “If ROI is not calculated in advance of implementation, it becomes difficult to validate or refute the expected value.”
Among the CIOs surveyed, the cloud computing services their enterprises use are:
- Software as a Service (Saas): 84%
- Infrastructure as a Service (IaaS): 49%
- Platform as a Service (PaaS): 36%
“The lack of a reliable industry standard calculation model is one reason more enterprises are not calculating ROI,” said Moyle. “An industrywide consensus on cloud ROI calculation will facilitate adoption of a formalised, accepted model.”
ISACA’s survey report is available at full white paper and survey results is available as a complimentary download at www.isaca.org/calculating-cloud-roi. ISACA also proposes mechanisms for calculating Cloud ROI in its paper titled, “Calculating Cloud ROI: From the Customer Perspective.”
About ISACA’s Cloud ROI Survey Research
The ISACA Cloud ROI Survey, conducted in August 2017, targeted chief information officers (CIOs) to gather information about current cloud ROI practices, surveying 102 professionals across a wide range of industries, company sizes and global locations including North America, Europe, Asia, Africa, Middle East, Latin America and Oceania.