I focused my last blog on prudence, focusing the attention of the CFO on the type of technology being used. Of course, it’s not usual for the CFO to get involved in specifying technology architecture, but sometimes a concept comes along that should be of interest to everyone on the board – no matter their level of technical knowledge.

The cloud and virtualisation of business services is one of those concepts, particularly the idea of paying for technology as it is used. Software, hardware and storage ‘as-a-service’ is a welcome and novel idea for business. Unlike more complex application development and transition of services, they require low initial investment and are quickly adopted – think about how easy it is to use the web tools you use in your daily life.

Managed services for business carry the double advantage of limiting capital investment (good for the CFO), while increasing the flexibility of IT infrastructure (good for all). And if suitable terms are negotiated with the supplier, managed services should deliver both on cost and capacity.

Understandably, concepts such as cloud computing have raised security fears. Choosing the right type of cloud for your managed services is crucial. Private clouds allow businesses to retain control of their critical data while external clouds are hosted by third parties in their data centre. Financial firms need to consider what information they need stored in the cloud and the security measures in place to protect that information.

I’m going to focus the next few blogs on some of the advantages of managed services and how the theory of the cloud maps to the reality of buying a service and paying as you use it.