Speaker
Description
Cloud computing offers numerous benefits such as scalability, flexibility, cost-effectiveness, and ease of access to resources and services over the Internet. This has led to the widespread adoption of cloud services by individuals, businesses, and organizations across various industries. Cloud services have direct cost-saving benefits such as reducing the infrastructure purchase cost, upgrades, maintenance and energy costs. However, there are capital expenditures, e.g. Upfront costs, operating expenditures (e.g. Subscription fees, Pay-as-you-go for resource usage) and benefits associated with cloud services that need to be quantified to allow decision-makers to estimate the value-added of cloud services. Therefore, the purpose of this paper is to develop a simulation model that can quantify the cost and benefits of cloud services compared to on-premises infrastructures. To achieve this purpose, a case study has been implemented on a specific bank service and the entire service operations are conceptualized and modelled with the help of the simulation modelling approach. Two scenarios have been simulated: (1) baseline scenario which is the existing on-premises service and (2) future scenario of cloud service. Moreover, two simulation experiments for each scenario are performed: (1) experiment one is to estimate the benefits for 1 day, and (2) experiment two is to estimate benefits and costs over 10 years, as some benefits need a long time horizon to be explored. The findings reveal a significant reduction in both direct and indirect costs resulting from the
transition, with staff expenses and operational inefficiencies emerging as substantial contributors. Notably, the research demonstrates an increase in worker utilization and a reduction in service time, suggesting improvements in operational efficiency. Moreover, the cost-benefit analysis indicates a robust ROI, increased NPV, and decreased TCO, thereby establishing the economic viability of the transition.
| Conference Topic Areas | Track7: Smart Operations and Maintenance |
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