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What the C-suite Needs to Know About … Cloud Computing

Retail chains are keeping a sharp eye on IT solutions that will deliver a fast return on investment and streamline business operations. A step in the right direction is to transition a legacy-based applications to the cloud, but a lack of understanding among the corporate hierarchy can slow efforts.

While many non-IT executives are not well-educated about the benefits of cloud, C-suite retail executives tend to understand what cloud computing is, and the benefits it provides. They realize that cloud computing allows their companies to provision the power and applications they need. They also understand the cloud’s elasticity provides more agility in their go-to-market strategies, and the open platform costs less to maintain and operate than mainframe options.

Retail CFOs are often in favor of cloud computing due to lower upfront investment costs, and oftentimes work with IT in the planning stages. In 52% of retail companies, both IT and finance groups work together when deciding whether to adopt cloud or on-premise ERP solutions, according to the Boston-based Aberdeen Group.

While more CIOs are in favor of pushing more operations to the cloud, it is not always a slam-dunk sell enterprise-wide. Issues slowing adoption include:

• Preconceived notions: Oftentimes, the C-suite may not believe cloud solutions are as robust as a traditional on-premise solutions, forcing CIOs “to prove that functionality will support business and that the solution is viable,” said Nick Castellina, research analyst, enterprise applications, Aberdeen Group.

• “Why fix what isn’t broken?” Organizations that have an established on-premise solution that works may not be open to change, especially ones that includes a new infrastructure, such as cloud computing.

• Lack of IT buy-in: Sometimes it’s not the C-suite, but the IT team that needs convincing. “Knowing that SaaS solutions require fewer internal resources, IT associates are wary about losing jobs,” he said.

© 2014