When is a Cloud-based supply chain solution worth it for businesses?

The Cloud has provided major benefits for businesses large and small. Instead of having to rely on traditional, on-premise servers and the limits of that technology in any and all situations, companies have the option of connecting with their data and their management systems remotely through Cloud computing. While the Cloud isn’t objectively better than on-premise servers, it offers an alternate method that can, in many instances, allow businesses to become more flexible and agile.

“The Cloud offers an alternate method that can allow businesses to become more flexible and agile.”

The comparative advantages
For supply chain management systems, a traditional implementation does offer some advantages. For one, it allows businesses to keep a system entirely in house. This isn’t a universal benefit, but depending on the circumstances, a company could certainly want to have this kind of added control. This means considerations ranging from system restarts to the storage of information and procedures is all controlled physically and directly by the company in question. Additionally, organizations are sometimes more likely to take ownership of a system when it’s situated in-house. One of the most practical considerations, the possibility of realizing lower long-term costs, should also be noted.

For Cloud-based systems, there are a number of distinct benefits that have to be weighted against what is offered by the traditional method. When it comes to the Cloud, costs are made more manageable because application licenses, hardware and technology aren’t all bought at once but are spread out and paid for on a monthly basis. Return on investment is realized more quickly because of this approach, while implementations tend to be less expensive and less time-consuming. Finally, there’s no need to involve or to provide access to system administrator resources because the software is in the Cloud. All of these advantages mean that it’s often easier for companies will less experience using software such as Oracle to successfully learn, understand and use the system.

The different benefits offered by Cloud and on-premise solutions have to be considered by organizations and compared to their current situations in terms of expertise, resources and other factors. While neither the Cloud nor the on-premise approach are right for all organizations in all situations, businesses will find that one or the other is often better suited to their needs.

“The ability to more easily access information can’t be overlooked from a business standpoint.”

When is the Cloud the better option?
There are many different pressures on businesses and their supply chains in the current market. The never-ending drive for more efficiency in the supply chain has helped organizations by creating leaner processes and more efficient methods of distribution, but it also continues to influence those who are in charge of that area of operations. That pressure, often centered around quicker access to more accurate data, has led to the growing adoption of the Cloud among many businesses. As just one example, businesses are turning to Oracle Transportation Management (OTM) in the Cloud as a way to realize rapid, low-cost-implementations and to see a quicker return on their investment.

Supply chain management is made easier for some businesses with a cloud-based platform.
Supply chain management is made easier for some businesses with a cloud-based platform.

The concepts of software as a service (SaaS) and business process as a service (BPS) — two key value propositions for businesses — both help organizations gain access to more accurate data on a shorter time frame.  The ability to more easily access information regardless of location can’t be overlooked from a business standpoint, especially when the supply chain and its far reach is considered. Of course, companies can’t just jump into using a Cloud-based system without understanding the advantages. Organizations need to account for both cost and of applications of the system and its unique advantages.

As far as the total cost of ownership is concerned, businesses need to make sure they’re assessing the right metrics. TCO should be projected over the course of several years, often stated in terms of a 4 to 6 year horizon. Because ownership costs are more spread out with a Cloud-based platform, those financial responsibilities will continue to exist longer than they would for a traditional solution.

Finally, companies need to be proactive in the development of strategies and tactics for working with vendors, partners, customers, information sources and others to integrate and share information access when possible. The ease of accessibility related to Cloud-based system is a fundamental success criteria. Prior to investing in Cloud-based systems, it is important that the selection team and key employees engaged with the business process are educated in the unique benefits and tradeoffs of a Cloud system.


To learn more about the benefits of the Cloud and the benefits it provides related to supply chain analytics, please join Inspirage and NBTY for on April 1st for a one-hour webinar on the “Supply Chain Analytics in the Cloud.”  Register now >>

Scott Pulczinski | Key Contributor

Scott Pulczinski is a Solutions Manager for the Logistics Management practice at Inspirage. Scott has 17 years experience in the transportation and consulting industries. He has been working with OTM for the past 12 years as both a Solution Architect and Project Manager.