A recent article in Forbes says that cloud computing is effectively changing the business operation model: “Cloud computing technologies are ubiquitous. While not exactly new technologies, the speed with which they’re transforming business models and efficiencies seems to have accelerated over the past few years.”
The principal transformation engendered by cloud computing is a new business IT model. In the old model, businesses hired IT professionals to run their computer hardware and software. IT professionals forecasted business needs as far out as five or 10 years, and made purchases accordingly. Today? Not so much.
The inherent problem with the old business IT model was forecasting. The Forbes piece underscores this issue:
"We’ve all heard horror stories of IT forecasting. For example, IT may forecast that a business will only need a certain amount of data storage for the next five years and only purchase the forecasted amount, without considering growth, more personnel, or even just more demand on the system. Then after only a year, IT realizes that they’re on the verge of running out of storage and need to purchase more."
Enter the cloud. With cloud computing, companies need not worry about running out of server or storage capacity, with cost benefits accruing to their bottom lines. “While you still need to forecast the amount of storage or server capacity that you may need, you no longer have to be overly concerned about the capital expense of scaling up your needs if you do require more space or capacity,” notes Forbes. “It’s far less expensive and less of a hassle to increase cloud storage and cloud server needs than on-site infrastructure.” Add to this benefit the operational pluses the cloud enables (e.g., process speed, collaboration across extended supply networks), and whole sectors are reinventing themselves with the use of the cloud.
Take manufacturing as an example. Another Forbes article lists ways that cloud computing is revolutionizing manufacturing, including:
- Capturing and applying company-wide intelligence and knowledge through the use of analytics, business intelligence (BI), and rules engines
- Piloting and then moving quickly to full launch of supplier portals and collaboration platforms complete with quality management dashboards and workflows
- Designing in-services becoming commonplace, making cloud integration expertise critical for manufacturers
- Accelerating new product development and introduction (NPDI) strategies to attain time-to-market objectives
- Managing indirect and direct channel sales from a single cloud platform, tracking sales results against quota at the individual, group, and divisional level (commonplace across all manufacturers visited)
- Automating customer service, support, and common order status inquiries online, integrating these systems to distributed order management, pricing, and content management platforms
- Increasing reliance on two-tier ERP strategies to gain greater efficiencies in material planning and supplier management and reduce logistics costs
What we see is the use of the cloud to streamline business operations across the enterprise. Further while cloud computing may not seem intuitively an eco-friendly development, greenerideal.com states that “a closer look reveals a number of green benefits.” Among those cited: "large enterprises that move their HR applications to the public cloud could cut CO2 emissions by as much as 30,000 metric tons per company in five years."
So not just transformation, but sustainable transformation is possible, which is something destined for broad appeal in today’s physical and business environments.
Posted by Epicor Social Media Team