Over the last 2 decades, the software industry has been revolutionized by the offering of more and more cloud-based solutions, also known as “Software-as-a-service” (SaaS). While cloud computing has been around for decades, advances in cloud technology with respect to performance, reliability, and security have enabled the development of cloud-based offerings for nearly all supply chain tools. Many well established software vendors are offering robust solutions for Enterprise Resource Planning, Demand Forecasting, Order Management, Transportation Management – even Warehouse Management – in the cloud.
What does a supply chain in the cloud mean to your business?
Before we explore further, let’s back up and explain what this means in the context of your business and supply chain management systems. Traditionally, businesses installed these systems on-premise, that is, installed on physical servers owned and maintained by the organization itself. While this approach allows for your business to have complete ownership of the systems on site, you’ll need an extensive IT team to maintain these systems, with the heavy responsibility of keeping downtimes to a minimum, securing sensitive data, and ensuring system performance is optimal. With this comes complications, as there often is with an over-reliance on tribal knowledge (which can walk right out the door via employee turnover at any time) and difficulty upgrading highly customized, on-premise systems to newer platforms within a feasible time frame.
Here is when the cloud comes into the picture, where responsibility to maintain the system infrastructure is out of your hands and managed by the solution provider (or other third party), allowing businesses to focus on their customers and what they do best. With cloud solutions, the software is already installed in a centralized platform maintained by the solution provider, where your organization’s users can access them with the proper credentials from any computer with a web browser connected to the internet. These solutions can be quickly implemented and scaled up when performance intensive processing is required without the need to maintain infrastructure in house. These solutions are also commonly purpose built with integration touch points and APIs available to other systems to support custom processing, allowing for the seamless transfer of data to and from different tools and your business’s custom-built processes. All of this results in a lower Total-cost-of-Ownership (TCO) for your business.
Things to consider before moving your supply chain to the cloud
There are some disadvantages to cloud based systems that need to be considered. Direct access to the application back-end, such as application upgrades, viewing application logs, and updates to the database, is rarely given (if at all) to end users and is solely managed by the provider. Downtime is another risk, where a loss of network connection or solution provider outage can stop your business until it is resolved. Security is also a concern. With the cloud, end users from multiple businesses using the solution interact with the centralized server on which it is installed. While end users only have access to their organization’s data, the large storage of sensitive data off-site can put it at risk to attackers. However, with recent advances in cloud technology, the reliability, performance, and security of these systems ensure that they can compete with and even exceed today’s on-premise systems.
Another point to note is in regards to systems that require high customizability such as a Warehouse Management System (WMS), which requires impeccable performance and complex integration with automation systems and thus may not always be best built for an off-premise cloud platform. If your business has unique processes requiring off-the-shelf systems to be significantly customized, on premise solutions continue to be the best option. These solutions frequently offer the ability to perform process flow changes to the software in house as required by your business.
Things to know before selecting a cloud solution provider
Not all cloud-based solution providers are created equal and offer the full capabilities of a purpose-built cloud application. During your selection phase, it is important to ask the vendor the right questions, going beyond simple demonstrations of day-to-day execution features.
Determine what type of cloud architecture the provider offers, ensuring you’ll get the true benefits of the cloud. In a bid to keep up with cloud-based solution providers, other software providers have been branding what is otherwise simply hosting and managing the on-premise built application on their own in-house servers as “cloud”. Beware of “fake cloud” solutions and ensure they offer true cloud-ready built solutions with multi-tenant, data-redundant systems (Hint: if the application UI of the “cloud” solution looks and works almost the exact same as the on premise version, this is an indication that it is likely not true cloud. A truly cloud based solution is built from the ground up with an entirely different application architecture than that of on-premise or hosted solutions.)
As with any software selection process, you should request demonstrations of end user configuration maintenance and note the ease and scope of configuration. In addition, request a detailed overview of integration capabilities, including available APIs to ensure the application can seamlessly integrate with your business’s other systems. If the solution is marketed with the ability to customize business workflows, UI layouts, or other application features which are important to your business, press the vendor to demonstrate how these features are developed – preferably in a live instance of the application. Compare all of these elements with on-premise built solutions and determine what is best for your business.
Is a cloud-based supply chain right for you?
Bricz supply chain experts can help analyze your business needs and determine if a cloud-based solution is right for you. Bricz has extensive experience working with both on-premise and cloud based solutions, with direct partnerships with solution providers with cloud based applications in the Demand Forecasting, TMS, WMS, and OMS spaces. Contact us today to learn more about cloud-based supply chain!
Contributor: Paul Spitznagel , Supply Chain Leader at Bricz