Digital Transformation: Striking optimal balance among cost efficiency, performance, and return on investment.

References from conference: "Maximizing ROI in the Cloud: Cost Optimization Strategies and Best Practices" - Tech Week Singapore, Savantraj C S, Pedro Enes

It is evident that in today’s rapidly evolving digital landscape, organizations are increasingly adopting cloud technology to foster innovation, agility, and scalability. New age technologies are continuously transforming industries worldwide. Consequently, discussions around cloud costs, AI, and GenAI have emerged as strategic priorities for every CXO.

Additionally, Heads of Financial Operations (FinOps) are consistently assessing costs while integrating them with performance analytics to enhance return on investment (ROI).

Although balancing costs with performance to maximizing ROI presents a significant challenge, there are effective strategies to achieve cost efficiency in the cloud. Below article highlights several ideas and approaches to consider for striking a balance between cost optimization and performance enhancement.

During the conference session titled “Maximizing ROI in the Cloud: Cost Optimization Strategies and Best Practices” at the Digital Transformation Strategy stage of TechWeek Singapore, industry leaders, including Savantraj from Yokogawa Electric International, Pedro Enes from EDP and other experts, shared valuable insights.

Here are some perspectives, including insights discussed during the session, that can assist leaders and stakeholders in optimizing their cloud and AI investments to maximize value.

1. Anchor conversations with relevant stakeholders: Facilitating a mindset shift and effective change management, along with testing benefits prior to full adoption, can significantly enhance discussions. Active involvement of stakeholders is essential to achieve a balance between performance and cost.
2. Establish visibility for expectations and accountability: Cloud or AI usage need not automatically be perceived as a negative or absolute cost. By linking usage to revenue or other pertinent targets, we can drive optimized value and set appropriate expectations.
3. Define key performance indicators (KPIs) for tracking ROI: Gaining insights into application usage, identifying underutilized resources/apps, assessing overall health, and establishing measurable metrics will enable us to maintain a continuous evaluation of performance.
4. Leverage automation and AI/GenAI for enhanced efficiency: Utilizing contextualized workload recommendations, employing machine learning for pattern recognition, detecting anomalies, and utilizing conversational GenAI to assess usage performance can all contribute to optimizing and sustaining value in collaboration between Revenue Operations (RevOps) and FinOps.

In addition to the above-mentioned points, it is essential to implement tagging not only for IT infra costs, but also for cloud applications to improve visibility and accountability. Identifying areas of overspending or underutilization, establishing budgets, and ensuring that revenue targets are met are critical steps in achieving a balance between performance and cost.

Every business process within the value chain, such as sales operations, supply chain, etc., where digital transformation initiatives are identified, and tools for enabling cloud and AI are implemented, can be incorporated into this framework for tagging and monitoring the effectiveness of application utilization across the organization.

For instance, ACTDBI INC. supports Revenue Lifecycle Intelligence enablement, which includes built-in capabilities for validating incurred costs against the effective usage of applications. This facilitates tracking performance metrics and enhances collaboration within RevOps & FinOps. The benefits include:

• Establishing a clear understanding of end goals and ensuring accountability across roles and departments within organizations.
• Utilizing persona-based applications that provide cost visibility metrics to monitor usage and adoption effectively.
• Developing strategies for planning and optimizing costs through targeted planning and continuous measurement of performance against KPIs linked to value assessment.

Moreover, alerts and insights can drive recommendations for workload management.

Author:

@Ruhi Garg: ActDBI | AI.Insights | Digital Transformation Xccelerator