When businesses don’t have an internal IT department, they can rely on the cloud for IT management. Cloud technology is less expensive than other types of connections. The cloud eliminates some costs that come with an IT department, such as hardware and employee salaries. There are however, hidden costs that can come with the cloud, costs which organizations can avoid.
Paying Decision Makers
Using the cloud can result in unintentional costs being incurred. For instance, certain employees charge for their time when simply deciding on cloud costs. According to a study performed by the research group Accounting and Information Systems, the hourly rate that decision makers charged a company was $112, which amounted to 36 hours in the end. Subsequently, at the end of those 36 hours, the total cost came to $4,032, when nothing had actually been bought. In order to avoid this cost, it’s important for businesses to eliminate time expenses by looking at reviews that sufficiently compare cloud providers.
Increasing Costs of Services
Many Internet, cable and cell phone companies tend to offer a set price for services and then raise the costs several months after the customer has started paying. Certain cloud service providers will use this same strategy. In order to prevent this from happening, customers need to make sure they are not receiving introductory costs in their service provider’s cost estimate.
Cloud Failure Expenses
Having information either corrupted or compromised is frustrating enough for companies, without also having to pay for those expenses when it isn’t the enterprise’s fault. Many companies don’t realize that data corruption can come with a price tag of its own. Before signing a contract, companies should make sure there is compensation from the cloud provider in the event of any data compromises.
Costs of Not Owning a Server
One of the financial benefits to having an in-house IT department is the advantage of owning a server. A purchased server is an asset; an organization can sell this server if necessary. Physical server assets can also be beneficial in luring investors who look at the company’s financial statement.
There are many ways that businesses can wind up spending more than what they intended on cloud services, but these costs are avoidable if every aspect of spending is considered. With hidden costs taken out of the equation, enterprises will be able to know exactly what they’re spending for the services they want.