From data storage to off-site backup to contract management, cloud computing offers several ways for your business to evolve. However, to take full advantage of this evolution of computing power, your company needs to evolve as well.

Just like cloud computing is affecting the technology that your IT department should be working with, it is important to understand that cloud computing is also affecting the mindset of your IT department. As Annalisa Camarillo stated in a recent Forbes article, “a disruption is an innovation so important that it forces change,” and cloud computing is such a force. In this post, we will focus in 3 ways that the thinking of your IT department needs to shift.

1. Focus on the Pareto Principle

Also known as the 80/20 rule or the law of the vital few, the Pareto principle indicates that roughly 80% of the effects come from 20% of the causes. The EaaS (Everything as a Service)  options presented by cloud computing trend requires IT departments to understand that:

• 80% of users will be helped by virtualizing 20% of the most demanded resources

This means that a company doesn’t need to jump straight into Platform as a Service (PaaS) or Infrastructure as a Service (IaaS) agreements. Companies can make the most out of their initial investment by tapping into Software as a Service (Saas), like a cloud-based enterprise contract management system that can be used by several departments, such as legal, sales, and accounting.

2. Focus on Strategic Thinking

This changes IT’s role from “messing around with computers” to one that now adds  the additional key skills of ongoing education, good communication, and consulting on corporate initiatives to the job.

Going back to the contract management system example, it is important to recognize that not only does a system like this streamline the operations of several employees but also allows a great trial run into the process of virtualizing enterprise resources. A transition from on-site computing to off-site computing requires careful planning from your IT department. There are several steps in the process and the IT team members needs to effectively communicate to all involved parties, while setting appropriate expectations, creating instruction manuals and troubleshooting issues.

The learnings acquired from transitioning teams from on-site applications to SaaS ones provides IT departments with a lot of critical information that helps them shape the direction of the company’s computing resources. As a result, the role of the IT department changes from reactive to proactive.

3. Focus on Cost and Utilization

Another important shift in thinking that comes from the adoption of cloud-based technologies is that cost is no longer just an overhead expense. In the past, technology investments were spread out evenly across all departments. This practice sometimes affected negatively the budget from smaller departments by limiting their annual resources.

With Saas, enterprises can keep a detailed log of utilization of applications and make better cost allocations to departments, which has a two-fold effect. First, it provides a more realistic budget to all departments. Second, it promotes a more efficient allocation of resources by departments. Think of the contract management system example; every single employee has an individual account, which will track his or her use. By pulling a simple report from the system of these user logs, you will have a clear picture of the utilization of resources and costs across departments. The result? You’ll be much more accurate when it comes to creating budgets for each department.

Takeaway

Cloud computing requires a paradigm shift for IT departments. It emphasizes operational efficiency, strategic thinking and cost tracking.