Cloud Economics

Worked Example

Material and data contained within this appendix is proprietary analysis on public data and remains the property of HE-Shared Services. It is presented as a case study of the findings of the proposed consultancy to illustrate project outputs. The examples shown are for full IT costs but the approach is applicable to all services.

There is a wide variation in cost/performance of the same activity in different institutions

A review of the services, per institution will reveal those services which should be purchased at lowest cost and those which are strategically vital to the institution and an investment target for differentiation

Depending on the area strategic sourcing options can be developed…

Sourcing will be strongly correlated to the strategic importance of the services

 

And it is likely that costs will show a big variation according to sourcing and the possibility of sector sharing [the emphasis of this study] or even commodity purchasing

 

The analysis begins with a schedule of services and a complete cost breakdown [a ‘heat map’] this must include the substantive functions [ie all costs must be accounted for and all major common services need to be included]

Collecting data for multiple institutions allows comparisons to be made between the set of organisations across all services

 

More valuable is to look at this data for a particular institute to understand performance as a leader [performance close to the best] or laggard [performance close to the worst]

This same data can be used to identify ‘clusters of interest between the leaders and the laggards. The method allows the auto-generation of the clusters requiring only incomplete participation, it is expected that different institutions will lead in some areas and be laggards in others. Institutions for whom a particular service is considered special and differentiating will not use the benchmarking process.