As cloud services continue to become more pervasive in organizations big and small, companies are looking for smarter ways to manage and evaluate cloud expenses. Many cloud services are billed on usage related to software, platforms, and infrastructure. There are generally multiple contact options available, various service bundles, and pricing structures which makes comparing and tracking cloud service expenses a challenging task. In fact, there are many relatable challenges between cloud expense management and Technology or Telecom Expense Management (TEM). While the category has many definitions, TEM is a set of strategies and policies organizations apply when managing their wireless, voice, and data environments to optimize performance, reduce risks, and lower cost. Today, TEM might also include a broader scope of IT services such as license, data, mobility, telecom, and the Internet of Things (IoT).
Parallel challenges between telecom expense management and managing cloud expenses include billing based on usage, frequent billing errors or contract disputes, high-potential for over-charging or runaway spending, and the risk of having unused or underutilized assets or cloud resources, which represented wasted spend. When making decisions about cloud payment models, organizations need to look for ways to uncover better insights into how their cloud resources are being used and look for optimize services and spend. To get a better handle on cloud expenses, many companies are turning to ‘lessons learned’ from telecom expense partners who specialize in expense management best practices and strategies. Let’s look at how businesses are leveraging traditional telecom expense management strategies to optimize their cloud services and cloud payments models for significant savings and meaningful results.
- Improving cloud visibility and details about consumption– The tricky thing about cloud services is that the economics of cloud are impacted by several related but independent factors, such as the way cloud is provisioned and the security of the workloads. Improving visibility into cloud usage is one of the first steps to streamlining management and lowering expenses. This process is like performing a traditional telecom expense audit that maps out a company’s current telecom and communication bills to look for overspend or un-used resources in other areas of the business. The goal is to identify all services and to look for ways to save money each month. Similarly, cloud expense analytics tools provide meaningful context cloud cost and usage data broken up by cloud products, departments, cloud providers, and business units. This added visibility serves as a cloud expense management starting point because it gives teams valuable information to support efficient decisions about cloud costs.
- Cloud management services provide ongoing value with automation and actionable insight – Conventional telecom expense management software and services are useful because they provide insight into telecom spending to identify opportunities to improve utilization. Today’s cloud consumption reporting applications perform a similar function for enterprises that are relying on multiple public or private cloud services, Infrastructure-as-a-Service (IaaS) options, or a multi-cloud environment. Cloud expense analytics software, for instance, enables companies to build financial reports that match the company’s organizational structure. This cloud data provides valuable insight into the impact of each type of cloud workload. For instance, cloud expense management tools offer proactive reporting that can improve the provisioning workflow, making internal teams more cognizant of cost-efficient provisioning policies. They can also improve security policies and improve compliance with more efficient management and insight. These tools add context to reports, allowing teams to spot potential overspending at the application level, to help determine the root cause of the problem.
- Evaluating and optimizing payment-models – With an inventory of all cloud services and enhanced visibility into cloud usage on an ongoing basis, organizations are better prepared to understand the pros and cons of various cloud agreements and fees. Today many managed service providers are also offering additional cloud expense management services, moving beyond inventory, analytics, and optimization to address challenges around charge reconciliation, cost identification, and predictive cost modeling of cloud workloads based on peak seasons, trends in the industry, etc.
With more visibility around cloud usage at a granular level, teams can avoid cloud overspending and create an environment where teams can still move quickly and be innovative, taking full advantage of cloud-based services. By following a traditional TEM approach, organizations can inventory their current cloud services, optimize their cloud environments, and track cloud service and resource consumption for future planning.