Cloud computing is an important area of oversight for boards of directors.
On one hand, cloud computing can present substantial opportunities for strategic moves and operational efficiencies. On the other hand, cloud computing also poses significant risks.
To provide effective oversight, board members need to have a clear understanding of cloud computing’s potential benefits across the organisation, according to a white paper produced by international IT professionals association ISACA.
Board members need to establish an understanding of the benefits cloud computing is expected to bring to the organisation and create metrics to measure how those expectations are being fulfilled, according to the white paper.
By aligning expectations with the enterprise strategy, board members can help the organisation achieve maximum benefits from cloud computing while optimising risk and keeping costs in check.
To accomplish these goals, board members need to ask management five questions with respect to cloud computing, the white paper says:
- Do management teams have a plan for cloud computing? Have they weighed value and opportunity costs? If competitors are taking advantage of cloud-computing opportunities, the risks cloud computing poses to an organisation may be negligible compared to the risk of falling behind the competition, the white paper says.
- How do current cloud plans support the organisation’s mission? Effective risk management and cost containment require alignment between the enterprise’s objectives and its cloud objectives, according to the white paper.
- Have executive teams systematically evaluated organisational readiness? Anticipating challenges helps enterprises avoid the need for post-implementation culture, skills or process changes, the white paper says.
- Have management teams considered which existing investments might be lost in their cloud planning? Cloud adoption may render previous technology obsolete and cause money directed to that technology to be viewed as a lost investment. Board members must carefully consider when and how to realise that loss, according to the white paper.
- Do management teams have strategies to measure and track the value of cloud return versus risk? Management teams should be directed to make sure proper mechanisms are in place to measure and report whether the cloud delivers the benefits and avoids risks as anticipated, the white paper says.
—Ken Tysiac (ktysiac@aicpa.org) is a CGMA Magazine senior editor.
