Cloud Computing?

Without a doubt, it is the “In” thing to look at Cloud Computing. What is it? What’s it for and what does it mean to businesses? When one thinks of a cloud – it is something ethereal – something intangible – that you can’t quite grasp hold of. You can only see it at a distance. Up close it is mist. Then why couple the terminology “Cloud” together with Computing? And what is the benefit to business owners to adopt this “new technology”?

In technology terms the “Cloud” is the Internet, and Computing is the services that can be delivered by a browser based application. These can range from an individual’s simple document storage to major software applications that run business processes. However large or small though, all the applications have one thing in common; they are all hosted and accessed via the internet. As people get more and more used to using the internet to store their personal documents, a natural filtering effect takes place in the adoption of Cloud technology in the business place.

In business the bottom line is saving operational costs, whilst increasing market share and profitability. From a financial perspective, it is a less expensive capital investment to employ the services of an application provider to: 1) provide the application and: 2) to host the application. The advantages are that you pay a monthly fee for this service with no initial investment. There are no operational costs i.e. maintaining of the system hardware, no investment in servers, no hardware maintenance, no need to employ highly skilled IT staff. The service provider ensures that the application is fed down line to the client and all the users log in to use it. This is known as the provision of Software as a Service or SaaS.

There is a plethora of Business applications that can be hosted on the Internet, including ERP (Enterprise Resource Planning), Financials, CRM (Customer Relationship Management), Warehouse Management and many more; that are deliverable as SaaS. Let’s look at WMS (Warehouse Management Systems) as a SaaS package. What benefits does this have for supply chain operations, warehouse managers, 3PL’sfor instance? The first obvious benefit is no capex spend. Secondly a hosted WMS can easily be interfaced to non-hosted applications, i.e. the ERP systems, Sales Order Processing, the Transport Management system, pulling together the Supply Chain. A third benefit is that cloud hosted WMS allows ease of execution across a number of sites, creating more warehouse services, allowing clients to disperse stock into a number of locations, and streamline the pick, pack and shipping process.

However there are arguments against Cloud Computing. A hosted application may not have the functionality or flexibility a business requires. People may not trust the technology to run a complex process. They may have to outweigh the cost of running an in house development team, which can be expensive, against the capability of suppliers to easily adapt and customise their requirements to a Cloud Computing model. Data security is potentially another issue, but the hosted application provider will probably have taken better security measures i.e. anti-hacking protocols, disaster recovery provision and have automated back-up services. Just the idea of relinquishing control may be a major issue.

For the small to medium business provider the financial benefits outweigh any risks. And where human resource is limited, it allows business owners/managers to concentrate on core business activities rather than distract resources to building internal hierarchies to maintain the IT. The real beauty of Cloud Computing is that WMS application providers will be able to supply a simple system for say, one or two users, “switching on” additional warehouse staff as the company grows and expands.

One thing that is certain is that Cloud Computing is here to stay, and will grow, expand and develop as time goes by. The real decision is whether to adopt the technology or get left lagging behind.

Author Linda Rodway

For more information on Cloud Computing and hosted WMS applications please call Linda Rodway on +44 (0) 121 717 7474 or email me moreinfo@proteussoftware.com

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