Jun 11, 2019
To cloud or not to cloud – it’s no longer a question
Most fast-paced companies are continuously striving for a leaner and more productive operation within their supply chain business. They are always looking for new and improved ideas, techniques, and methods to gain a competitive advantage. It’s no surprise then that the subject of cloud technology is generating a lot of interest in companies today.
The introduction of cloud technology has completely altered our way of thinking in terms of infrastructure, software delivery as well as software development models and promises to drastically reshape how computing power and data is obtained and managed.
Companies that leverage their supply chain for competitive advantage face different challenges to those in other industries when it comes to evaluating the potential use of cloud technology. It’s a lot easier for new startups to set up a new business in the cloud with new products and services quickly and cost-effectively, so companies with complex supply chains beware – it’s open season for new entrants. Supply chain companies that have traditional infrastructures will be forced to re-invent themselves to meet the competitiveness of these new entrants so that they too can provide a more dynamic and scalable business model.
Things to consider when making the move
Supply chain ecosystem
Very few companies own, operate, and control the entire supply chain from start to end. You need to get agreement and buy-in from all parties, which can slow down your transformation plans and create additional complexities.
Security of data is always a concern, whether you are operating a traditional IT infrastructure or a cloud infrastructure, lost data can lead to lost IP, lost customers, lost products. Security needs to be your central pillar in your process.
Supply chain companies can look at ways to stagger their migration to the cloud instead of making a significant move on all their applications. Taking the “big bang” approach and going all in can be complicated, costly, and the probability of success is lower.
Supply chain functions that are best suited to transition to the cloud are ones where no customization is required:
- Planning & Forecasting
Planning and forecasting is rarely a core component in your ERP, so you can add on this functionality in the form of a best-of-breed, cloud-based tool.
More and more applications are becoming available in the cloud to manage such things as transportation and route planning, fleet management, and warehousing.
- Sourcing & Procurement
Cloud-based sourcing and procurement tools allow for collaboration and accessibility, which creates significant benefits for companies that deal with many suppliers across national and international borders. Multiple parties can develop their contract management, report generation, database, and full supply chain visibility.
- Service Management
This is an area that has significant advantages when taking to the cloud without enormous capital expenditure costs. Dispatching and tracking technicians, warranty validations, and spare parts inventory are functions that currently benefit from cloud technology.
The cloud revolution is here
Although it’s still relatively early in the cloud revolution, companies are already experiencing the benefits that the cloud delivers: rapid implementations, secure and inexpensive systems, and lower maintenance and upgrade costs. Furthermore, cloud technology is elastic in design and enables you to scale up with ease – even switching to an entirely new application can be achieved without a lot of costs or complexity.
When doing your analysis, be sure to take the following points into account, as this will help to formalize your planning.
- Decide which processes you should keep on premise and which would be best suited to take to the cloud.
- Do your due diligence when looking at prospective suppliers – ask for data-driven analyses to see the anticipated benefits they plan to provide.
- Make sure you involve all your supply chain partners and company stakeholders in the process and decision making from the start.
It’s no longer a matter of “if” you move to the cloud, but “when” you move to the cloud. Frankly, the operational and cost benefits make the decision a no brainer. If your company has not yet started its journey to the cloud, now is the time.