We recently sat down with Allen Rittscher, President of <a title="Virtual C-I-O" href="http://www.virtual-c-i-o.com/" target="_blank">Virtual C-I-O</a>, to chat about cloud computing's opportunity for the enterprise, advantages over alternative computing methods and whether or not c-level executives believe in the cloud's promise to reduce operating costs while spurring on new innovations.

<span style="color: #3366ff;"><strong>eGroup: </strong>A company executive’s objective is to “do more with less”; how can this be achieved when collaboration and productivity requires the latest technology and applications?  For example, incorporating cloud computing, which some believe is hype.</span>

<strong>AR:</strong> This is an area in which the CEO, CFO and IT management must be in agreement and have a level of trust in each other’s role. Given the CEO’s vision for the organization, IT management will design an effective technology environment to support all staff members in achieving that vision. When this IT design has been created in proper alignment with the business vision / mission, it will be very cost-effective in addition to being a performance and cost-reduction catalyst. “Doing more with less” is the natural by-product of a strategic business-aligned IT environment design.

<span style="color: #3366ff;"><strong></strong><span style="color: #000000;">Cloud computing has grown past the hype phase and is now a maturing option for businesses of all sizes to significantly reduce operating costs.  It can also reduce capital requirements for key IT commodities such as email, document management, customer relationship management systems and collaboration technologies.</span></span>

<span style="color: #3366ff;"><strong>eGroup:</strong> When it comes to enterprise / business goals, what challenges do C-level executives face today?</span>

<strong>AR: </strong>Today’s C-level executives face the challenge of accomplishing much-needed goals of the enterprise within the confines of annual budgets and resource allocations.  Most CEOs, though, are becoming aware of modern approaches to delivering IT services via cloud computing and through the use of global resources.  They are increasingly pushing their agendas through means that do not require the same level of investment as in years past.

These modern approaches free up dollars for core technology investments by reducing annual operating costs of non-core technologies.  Virtual C-I-O is helping both small and large enterprises to leverage these approaches to deliver technology based services that are helping control -- and in most cases reduce -- the operating costs to further generate competitive benefits.

<span style="color: #3366ff;"><strong>eGroup:</strong> What indicators should be recognized by a CEO to prompt a company’s complete IT assessment?  How can the CEO and CFO generate a clear picture of total IT expenses?</span>

<strong>AR:</strong> Understanding all IT costs, including the “hidden costs” of acquiring and maintaining IT assets, can help reduce unnecessary expenses and move funds to other key areas.  The old adage “until you measure, you can’t control” applies here.  Inaccurate IT spending analysis leads to waste, improper budgeting and low cost efficiency.  Always include direct and indirect costs in IT analysis.  As part of a comprehensive IT assessment, technology actual costs as well as planned costs need C-level visibility.

<span style="color: #3366ff;"><strong>eGroup:</strong> How should we define “cloud computing”?  Do you believe that company top management has other definitions?</span>

“Cloud computing” has many different definitions in today’s market.  For the small to medium sized business owner they should view the “cloud” as an avenue by which they acquire key IT systems for email, document management, customer relationship management, accounting, etc.  On a per-employee basis, where a monthly fee is paid to acquire the technology, cloud computing can keep the technology current.  For key functions like backups, accessibility and mobile enablement are built-in benefits.

In larger enterprises, “cloud computing” takes on many different meanings and is generally viewed as a means to deliver systems to employees and clients over the internet, buy processing and data storage on an “as needed” basis and a means for acquiring non-core technology like email and document management.

<span style="color: #3366ff;"><strong>eGroup:</strong> What are the primary concerns, objections or misunderstandings that C-level executives have about the cloud?</span>

<strong>AR: </strong>The primary concerns among C-level executives are cost, reliability and security.  These concerns generally stem from a misunderstanding of what the cloud actually is.  Most misunderstandings are around what is known as the “public” cloud and that is generally associated to services such as g-mail.  An executive’s worry usually comes from news reports regarding security breaches or system wide outages.

What most C-level executives fail to think about is that those same instances can and do happen in their own company.  In many cases the measured SLA is actually less on internal systems than a service provided by companies like Google or Microsoft.  Today cloud providers are delivering services in a capacity typically offers greater service levels than internal resources and generally do so at a lower operating cost.  A recent article in the <em>Harvard Business Review</em>, “What Every CEO Should Know about the Cloud”, addresses these topics as well.

<span style="color: #3366ff;"><strong>eGroup:</strong> How can we effectively educate top management on the cost, security and efficiency advantages of “the cloud”?</span>

<strong>AR: </strong>Educating top management is happening in many different forms today.  Company IT executives have gained a better understanding of cloud services as they struggle with the relentless imperative “do more with less”.  Many reputable technology research sources like Gartner and Forrester have expanded their coverage of topics regarding the cloud and not to mention articles from the <em>Harvard Business Review</em> and other management publications.

To gain a better understanding on cost organizations will need to learn more about their own IT spend and ultimately get their IT costs down to an employee.  With having information about cost of IT by employee a company can effectively analyze the cost on a per user basis which most cloud providers charge by user.  Security on the other hand is something that needs to be researched and compared against internal capabilities.  Cloud provider such as Microsoft and Google are housing their cloud based infrastructure in Tier-3 data centers, similar to that of the banking industry.  So in many cases an effective cloud strategy can not only create greater cost savings, but greater efficiencies and greater security as well.

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Allen Rittscher serves as President of Virtual C-I-O, a Jacksonville, FL-based IT strategy consulting company, since its founding in 2012.  Previously he served as Chief Information Officer for Volt Information Sciences, Inc., a Fortune 500 HR services company, and President of ProcureStaff Technologies, a software development company.  Prior to that, Mr. Rittscher held information technology management positions with MPS Group and Barnett Bank.  He earned his BS degree from the University of North Florida and MBA degree from Jacksonville University. For more information on Virtual C-I-O, visit www.virtual-c-i-o.com.