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Business Drivers in Cloud Computing

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  • Last Updated : 10 May, 2021

Business Driver :
It is the interface or resource, and a process that is used for the growth and success of the business. Every business has its own driver to which they decide as per the circumstances. Business drivers are the key inputs that drive a business operationally and financially. Businesses have been motivated to adopt such business drivers to achieve organizational goals. 

Example –
Some common examples of business drivers are the quantity and price of the products sold, units of production, number of enterprises, salespeople, etc. 

Business Drivers in Cloud Computing :
Business drivers have motivated organizations to adopt cloud computing to meet and support the requirements of these drivers. They have also motivated organizations to become providers of the cloud environment. There are three types of Business Drivers as follows.

  1. Capacity Planning
  2. Cost Reduction
  3. Organizational Agility

Capacity Planning :
Capacity planning is the process in which an organization estimates the production capacity needed for its products to cope with the ever-changing demands in the market. This involves estimating the storage, infrastructure, hardware and software, availability of resources, etc. for over a future period of time. There are three major consideration’s incapacity planning as follows.

  1. Level of Demand
  2. Cost of Production
  3. Availability of Funds

Other Strategy :
Taking these considerations into account let us look at the different capacity planning strategies that exist. Let’s discuss it one by one.

Lead Strategy –
This is a strategy where the capacity is added beforehand in reference to a future increase in demand. This strategy keeps the customers intact and prevents competitors from luring them back in.

Lag Strategy – 
This strategy is where the capacity is added only when it is required, that is, only when the demand is observed and not based on anticipation. This strategy is more conservative, as it reduces the risk of wastage but at the same time, it can result in late delivery of goods if not planned outright. 

Match Strategy – 
This strategy is where small amounts of capacity are added gradually in required intervals of time, keeping in mind the demand and the market potential of the product. This strategy is said to improve performance in heterogeneous environments and hybrid clouds. 

Cost Reduction :
Cost reduction is the process by which organizations reduce unnecessary costs in order to increase their profits in the business.  There is a direct alignment between the cost and the growth of the company, which is why cost reduction is an important factor in the organization’s productivity. The maximum usage requirements should be kept in mind when dealing with the performance of the organization.

Cost factor –
Two costs should be taken into account as follows.

  • The cost of acquiring new infrastructure.
  • The cost of its ongoing ownership.

Tools and Techniques for cost reduction –
There are the following tools and techniques that are used to reduce costs as follows.

  • Budgetary Control
  • Standard Costing
  • Simplification and Variety Reduction
  • Planning and Control of Finance
  • Cost-Benefit Analysis
  • Value Analysis

Organizational Agility :
Organization agility is the process by which an organization will adapt and evolve to sudden changes caused by internal and external factors. It measures how quickly an organization will get back on its feet, in the face of problems.  Agility requires stability, and for an organization to reach organizational agility, it should build a stable foundation. In the IT field, one should respond to business change by scaling its IT resources. If infrastructure seems to be the problem, changing the business needs and prioritizing as per the circumstances should be the solution.

Principles of Organizational Agility –
The five principles of Organizational Agility are as follows.

  1. Frame your problems properly
  2. Limit Change
  3. Simplify Change
  4. Subtract before you Add
  5. Verify Outcomes

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