For many companies, the cloud computing debate is over. They are no longer asking if they should move to the cloud; instead, they are asking when and how. According to a 2017 Deloitte survey report, 93% of organisations already use cloud services in one way or another.
Rishi Mehra, in his new role as chief financial officer, Asia at AON, says data is more secure in the cloud these days because cloud service providers spend a great deal more on securing their infrastructure than most other organisations.
“As a CFO, you variablize your entire cost around data centres and some of the technologies and techniques needed to run the data centre. Variabilization of cost is music to the CFO’s ears. And with the amount of competition in the area of cloud provisioning there is definitely a potential for further reducing the cost to companies,” he concludes.
According to the BCG Strategy paper Opportunities for Action, fixed costs have merit by turning growth into scale effects and cost advantage, and ultimately into profit. But these market characteristics are no longer widespread. In some cases, fixed costs have become a liability to organisations.
BCG postulates that in a world where all costs are variables, if a downturn or a new entrant cuts 10% of sales, profits dip by only 10%. To triple a business activity in 3 years means concentrating on the sales side, as the cost side will take care of itself.
In this environment, profit is achieved not through amortisation of fixed cost but through speed and agility – thanks in part through variabilization.
Learn more from Rishi and other CFOs in the video links below.
Click here for the full article: Driving a culture of transformational innovation
Click here for the full article: How CFOs can mine big data
Click here for the full article: Say goodbye to financial spreadsheets
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