Although cloud computing persists as a top priority for CIOs this year, cloud is still in its infancy and already is undergoing significant revisions to improve its value proposition for more discerning customers. By "more discerning" I am referring to businesses that are looking for more than generic IT resource rentals and provisioning during processing peak times. Instead, they are increasingly expecting cloud services providers to deliver solutions with the ability to make major operational and financial impacts on strategic areas of the business.
For cloud services providers to do this, they have to demonstrate that they can bring industrial strength solutions to the table that can meet the governance, security and product quality expectations of enterprises—and also deliver business value that is either going to make a difference for strategy or revenue, or can be used for cost cutting. These cloud services providers also need network architectures that network, database and application specialists in their customer IT departments can easily work with.
Let’s take a look at the strategy and revenue side of the equation first. When the volcano in Iceland struck earlier this year, company supply chains were disrupted because planes were grounded and other modes of transportation to and from Europe became clogged with an unanticipated demand that normally would have gone airborne. Companies that were on top of the transportation situation were those that had early visibility into their end-to-end supply chains and how the volcano was going to impact them. This kind of external visibility is not readily attained with internal supply chain systems like ERP (enterprise resource planning). Instead, companies with well-established external business processes and
agility for the supply chain immediately acted upon the information they received. They were among the first to reroute traffic so their orders would stay on time. The end result was little or no interruption to the product flow into consumer markets, while some of their counterparts were unable to make the same transition.
How did they do it? In many cases, the key facilitator and new "difference maker" that provided all of the external supply chain visibility (and the ability to change supply chain direction rapidly) was a cloud-based supply chain solution. In these cloud-based solutions, which already contained a network of up to 80% of the world’s suppliers and logistics providers for a specific industry, companies were able to quickly onboard alternate suppliers and logistics providers as they worked through the natural disaster in Iceland. Together in the cloud, these parties become a kind of "social network," posting documents to each other and exchanging information using a common database. Because they were all using a single database on a shared network in the cloud, they were all working from a "single version of truth." This eliminated the extra coordination and discussions that often become necessary between companies when each has its own database, with its own records of how a particular order or transaction is unfolding.