For years, forward-thinking businesses have been managing their supply chains (SCM) in order to optimize efficiencies and bolster their bottom lines. Data supporting strong forecasting and demand management can provide critical competitive advantage for companies ranging from Apple to Zappos. Proper SCM provides capacity when needed in the most cost effective manner possible. It means having the resources ready to quickly enable workloads, which, in turn, produce revenue for your firm.

While IT decision makers might not be used to thinking about applying a similar philosophy to their technology infrastructure, the time has come to do so thanks to the rise of cloud computing and advanced IT consumption management models.

No doubt, there are parts of the supply chain where IT has honed its processes very well. Most CIOs take pride in their ability to negotiate prices with preferred vendors and therefore better manage diverse suppliers. Asset inventory controls are greatly enhanced with the use of discovery tools and configuration management databases. However, CIOs may not have the same confidence in their ability to execute demand forecasting across a hybrid IT environment encompassing both on-premise and cloud infrastructures.

Old School IT Services Delivery Meets the Cloud

In the past, when businesses needed additional computing resources, they had to select a vendor, order equipment, install the right software, provision it, configure it and then test it to make sure everything was ready for “primetime” and production-ready. Before those steps took place, there were many hours spent getting the necessary approvals from governance committees or financial teams for funding authorization. Capacity management teams pored over multiple sets of statistics, marrying current usage with incoming user or project requests. All of this took a sizeable commitment of man-hours. The funds used to acquire any required hardware covered the capital dollars, which meant decisions had to stand the test of time in terms of the useful life of the equipment. This cumbersome process could take weeks and often made other departments perceive IT as unresponsive, uncooperative and a barrier to increased productivity.  

When businesses leverage the cloud, they’re able to provision resources on an as-needed basis and at a much faster pace compared to acquiring for an on-premise data center. However this can also introduce ‘Shadow IT’, or in other words, freedom for business users to acquire IT resources outside of IT to meet their own specific needs.

The procurement of IT services in the shadows and outside the purview of the IT department can lead to security breaches, inefficiencies, billing issues and compliance violations. Recent research by CipherCloud finds 81 percent of line of business employees admitted to using unauthorized SaaS applications. There is a strong mandate for centralized IT organizations to bring this rogue activity under control. With proper IT financial management solutions deployed—technology that provides decision makers with real-time usage information—businesses are able to focus on both short-term and long-term IT demand and deploy the right set of resources that the organization needs the moment those needs are evident.

IT must find more effective and efficient ways to evaluate resource needs to stay “in the game.” After all, technology drives innovation that in turn leads to a competitive advantage. With robust consumption-based management software in place, the IT team is able to take a deeper dive into levels of computing usage across business and geographic units and applications. That usage can be viewed historically and trended to better forecast future computing needs. Better forecasts equates to better timing and selection in the provisioning step. Think of it as just-in-time cloud computing.

Consumption-based Management: A More Effective Means to Manage your Technological Infrastructure

Using a consumption-based IT management approach, you collect all pertinent data across the hybrid IT environment -- both internal operations and external sources, including public cloud, private cloud, virtual resources, traditional resources, network and applications. This usage data is enriched with business intelligence, allowing views of usage by department, geography, technology, and application. When the data is married with unit costs, a financial control plane is created, allowing IT to understand the cost of all IT resources in aggregate. By having the most up-to-date view of usage by user and costs, your reports and analytics show both the historical perspective across a variety of views that enhances forecasting.  Rather than evaluating a series of unique projections by technology provider, the CIO can recognize more alternatives for provisioning and required timing. Decision points can be further illuminated through comprehensive automated alerts and forecasting algorithms.

Businesses seeking efficiencies in their technology infrastructure used to spend months planning how to make changes and effect change. Now, thanks to the marriage of analytics with detailed consumption data, IT operations can apply the supply and demand economics to technical systems, enabling real-time decisioning and greater efficiencies, which in turn cuts costs and maximizes productivity. Adding clarity and control through consumption-based IT management makes your supply chain much stronger.

Penny Collen is a senior financial solutions architect at Cloud Cruiser Inc.

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