In a cloud adoption strategy, what is a primary risk associated with poor financial governance?

In a cloud adoption strategy, poor financial governance can lead to over-provisioning resources, which significantly contributes to unnecessary waste. Over-provisioning occurs when an organization allocates more cloud resources than are actually needed for their workloads. This often happens due to a lack of oversight or understanding of cloud billing and usage metrics, resulting in higher costs with no corresponding benefit.

Good financial governance promotes the establishment of budgets, tracking of expenses, and analysis of resource utilization, which helps in making informed decisions about what resources are truly necessary. When governance is weak, organizations might provision resources based on assumptions rather than actual usage data, leading to increased expenditures without the anticipated gains in efficiency or performance.

The impact of such waste not only affects the financial health of the organization but can also hinder the overall success of the cloud strategy. By effectively managing financial governance, organizations can optimize their spending, ensure they only pay for what they use, and align their cloud strategy with business objectives.