Cloud Computing: A Scalable Supply Chain Solution

One of the biggest conundrums for small-to-mid sized businesses has been highly efficient software capable of improving their operations, but at a cost that is simply out of reach.  All that is changing thanks to a trend that that is causing buzz and excitement, allowing businesses to have the technology solutions they crave at a lower cost.  These businesses are turning to cloud computing, which just might be the biggest thing to hit supply chain management since the automated warehouse.

In its most basic definition, cloud computing allows a business to “rent space” on a web-based service provider’s server, so that a business’ entire IT-function exists on that external server.  This means a business no longer needs to operate its own internal systems, software licenses or IT function.  Instead, employees – and anyone else authorized to visit that business’ cloud – can log on from any computer with remote access.

Businesses that have craved the ability to easily on-board vendors, share data with suppliers, or to have cross-company document-sharing capability, are finding cloud computing to be an ideal solution.   Among the benefits:

Cost Containment – Only pay for what you need: Cost savings are a major attraction for businesses that move to the cloud.  World Trade Magazine reports that benefits include not having to incur capital expenses for hardware and IT development, and greater efficiency which results from giving access to pertinent data to all parties involved in a particular function.  Businesses can contract with providers for certain levels of usage, which can be revised up or down at a moment’s notice.

Flexibility: Small and medium sized businesses sometimes find that “out of the box” software solutions generally cannot meet their precise business needs, but they lack the clout to pressure software developers to make changes, Cloud computing – or its cousin, Software as a Service (SaaS) — solves this problem.  As defined by the Gartner Group, SaaS refers to software that is owned, delivered and managed by one or more providers.  The providers deliver an application based on a single set of common code and data definitions which are consumed by all contracted customers on a pay for use or subscription basis.

Scalability: Along with that flexibility, cloud computing allows scalability so that businesses can easily adjust their storage and usage capacity based on their precise needs.

Accessibility: Because all data is stored on a web-based platform, an employee or other authorized user will be able to access the system remotely, using any computer with Internet access.

Most IT experts agree that the concept of cloud computing as a supply chain solution is still in its early stages, but that it’s only a matter of time before it becomes standard operating procedure.  Gartner Group has estimated that businesses will spend $150 billion on cloud computing by 2013 –  a concept that has only been in the public domain for the past five years or so.