Thursday, October 2, 2014

The Answer is a Number: Assesing the Value of Cloud Solutions

Organisations know that they are losing money on un-adopted technology. Getting ‘shelfware’ off the books is often viewed as a minor victory, but what of the value that could, and should have been delivered by this unused technology?
Unlike traditional software licensing models, many Cloud solutions have pricing structures based on usage. Value, therefore, is delivered as a function of the number of successful transactions. Clearly, if no transaction occurs, no value is delivered, but even when solutions are adopted and users are transacting successfully, we often don’t know how to assess their value beyond ‘ease of use’.
The upshot is that when an organisation goes through a period of cost cutting, the op-ex, subscription-based pricing models of Cloud solutions means that they are often first in the firing line. If we’re not correctly evaluating the potential of those solutions to deliver quantifiable value, we have no idea if we’re trimming off the excess or cutting into muscle.
Electronic Signatures and Digital Transaction Management make an interesting case-in-point. Most transactions save paper, ink and postage, so there are significant per-transaction savings even before human-related costs are factored in. When you include economies relating to overheads such as track and chase, archiving, retrieval and audit, these savings can become extremely compelling indeed. In order to assess cost savings, however, you need metrics: how much time saved is per senior resource and what is the cost associated with that time? What are we spending on storing of paper contracts in a fire-proof facility? The list goes on.
Remember, these costs might well be distributed across multiple cost-centres. It is therefore important to assess the value brought to the organisation as a whole, rather than to a single business unit. Expressing that value in way that makes sense to a cost-sensitive CFO is essential. Value expressed in time saved is one thing, value expressed in dollars and cents is another.
Lack of adoption of a solution tends to be a business problem rather than a technology problem. Once you have quantified a solution’s potential value, you’ll need to create a vision for change to close the gap between that value, and the value your organisation is actually getting.
The next time you identify un-adopted software in your organisation, as yourself “what value am I missing out on by not fully adopting?” And remember: the answer is a number.
Kevin Boyle is an eSignature and Digital Transaction Management specialist with DocuSign. Connect on LinkedIn, follow on Twitter.