Supply Chain Digital Transformation – Cloud Computing

“The Cloud” has revolutionised the approach to enterprise IT in almost every industry; It provides the ability to harness essentially unlimited on-demand resources and services in a cost-effective, easy-to-manage and dynamically scalable way.

There are two models that are most commonly used to consume cloud-based services.

Infrastructure-as-a-Service (IaaS)

IaaS involves the provision of base infrastructure, primarily computational power and data storage.  It enables organisations to “rent” IT capability as required, either instead of or in addition to, owning and maintaining an on-premises data centre. 

Software-as-a-Service (SaaS)

SaaS is the provision of a complete encapsulated application or service, typically licensed per number of users.  The SaaS provider hosts the software in a secure private cloud, allowing multiple users and entities secure access via a web browser to deliver a uniform experience across the board.

Both models offer a huge range of benefits for organisations that include, but are not limited to, the following areas.

Global Connectivity, Communication & Collaboration

Cloud-based technologies offer an unparalleled way to connect people, processes and partners across the supply chain network.  By providing a single instance of an application with global accessibility, previously siloed operations across multiple sites can be integrated to provide a uniform experience across the entire business, with significantly increased visibility.

The flexible yet secure method of delivery also provides the opportunity to give external partners access to selected shared systems and information, increasing collaboration and efficiency across the supply chain network.  This allows organisations to work together to focus on optimising the supply chain as a whole, rather than the individual parts.

Flexible, Scalable, On-Demand Infrastructure

On-premises infrastructure, particularly at enterprise scale, is often extremely rigid.  As businesses grow organically, additional resources are generally bolted-on, rather than truly integrated.  As they grow through mergers and acquisitions, the disparate hardware acquired can result in siloed operations and redundant equipment.  Fluctuations in demand mean that at least some hardware usually sits idle and unused, waiting “just-in-case” demand rises.

The “pay-as-you-go” model of the cloud enables organisations to dynamically scale environments and resource availability up or down as required, to achieve the best balance of cost and performance.  With nothing more than a credit card, virtual machine instances can be spun up in moments, or additional storage buckets can be made instantly accessible to the business.

Reducing the Total Cost of Ownership

Adopting cloud services can have a dramatic impact to business expenditure.  Many companies are looking to leverage the cloud as a way to reduce the physical footprint of on-premises data centres and their associated costs.  Aside from the huge upfront investment, the day-to-day running costs of a data centre – power, lighting, cooling, security, monitoring and maintenance, upgrades, etc – must be accounted for as well.

With both IaaS and SaaS models, these burdens are all shifted to the Cloud Service Provider (CSP), who will operate and maintain the equipment, ensuring the company has access to the latest and greatest technologies.  Because CSPs typically provide these services on a “pay-as-you-go” basis, organisations will only pay for the resources they are actually using.  This creates an extremely cost-effective solution that allows IT budgets to shift from large CAPEX models to predictable OPEX models.