Cloud architects: Try thinking like a CFO

When I ran architecture teams, I gave one piece of advice that often surprised people: “We need to think like CFOs and not CIOs.” I voiced this reminder whenever the work veered away from, “What business value are we seeking?” toward, “Who has the best cloud?”

The goal of any cloud architecture team is to find the solution that returns the most value to the business, not the most popular cloud solution with the most features. This means looking at a different set of metrics, one that is often shared with our friends in the CFOs office. Here’s why this is a healthy exercise both for the business and for the architects.

Finding solid business value

Cloud computing architects face the critical challenge of demonstrating traceable business value. It’s natural for cloud architects to align themselves with CIOs, whose focus is traditionally on technology management and the latest hype. However, shifting toward the CFO’s perspective could ensure that cloud strategies align with the financial objectives and unlock the maximum return on business value. 

The CFO’s domain includes numbers, efficiency, and value creation. Today’s CFOs are more invested than ever in understanding how expenditures translate into return on investment and strategic advantage. Cloud computing architects must recognize the importance of attributing tangible business outcomes to cloud initiatives. This mirrors the essence of financial analysis, where every dollar spent is scrutinized for its potential return. 

A Deloitte study revealed that companies leveraging cloud-led innovations saw financial performance improvements of upwards of 20%. I personally worked on this study a few years ago. We found that integrating a financial viewpoint into cloud architecture decisions is beneficial and necessary for accurately predicting and demonstrating business outcomes. I’m not sure why this is even a question, but it’s a sales pitch I’m giving about twice a week now about cloud and AI.

Technology doesn’t fix everything

CIOs are often driven by technological advancement and operational efficiencies, whereas CFOs demand a more granular understanding of cost structures and revenue impacts. Historically, many cloud initiatives have failed to deliver expected benefits, primarily due to a lack of focus on cost and value metrics. My writings echo this sentiment, emphasizing transparency and measurable performance outcomes. 

Cloud architects must cut through the hype and focus on real-world applications and benefits. More than mere technological enhancement is required; architects must make a clear financial case. This is particularly apt in environments where executive decision-makers demand justification for every technology dollar spent. 

Aligning cloud architecture strategies with business outcomes requires architects to step beyond traditional roles and strategically engage with critical financial metrics. For example, reducing operational expenses through efficient cloud resource management will directly impact a company’s bottom line. A successful cloud architect will provide CFOs with predictive analytics and cost-saving projections, demonstrating clear business value and market advantage. 

Moreover, the increasing pressure on businesses to operate sustainably allows architects to leverage the cloud’s potential for greener operations. These are often strategic wins that CFOs can directly appreciate in terms of corporate financial and social governance metrics. However, when I bring up the topic of sustainability, I receive a lot of nods, but few people seem to care. But that’s a topic for another blog. 

The path forward

To create the best business-oriented cloud architectures, enterprises should focus on the following points: 

Align cloud strategies with business goals. Enterprises need to ensure that cloud initiatives directly support goals such as revenue growth, cost reduction, and improved market competitiveness. Regularly engaging both IT and business stakeholders to review and adjust cloud strategies can help align technology with shifting business priorities. 

Implement robust financial governance and optimization. Establishing comprehensive financial oversight can ensure cloud spending delivers maximum value. This includes using tools for cost tracking and management and applying cloud financial management practices, often called finops. These practices help monitor usage, optimize spending, and scale resources according to demand, ensuring efficient budget allocation and enhancing ROI. 

Improve collaboration across departments. Promoting cooperation between IT, finance, and business units will drive cloud initiatives that leverage insights from across the organization. Cross-disciplinary teams with technical and commercial expertise can help create technically sound and commercially viable solutions, ultimately solving real business challenges and enhancing operational efficiency. 

Cloud computing architects who adopt a CFO’s lens toward cloud architecture practices are better positioned to drive successful business outcomes. Integrating technical skills with financial acumen is pivotal to innovative, profitable outcomes as cloud architects transition to a more business-focused role.

By focusing on quantifiable business value, cloud architects help organizations fully harness cloud computing’s transformational potential, much like CFOs who navigate and optimize financial landscapes. In a world where economic performance is paramount, the ability to think like a CFO could be the key to cloud architecture success. Let’s give it a try.