By Mark Humphlett, Director of Industry & Product Strategy, Infor
Sometimes, it’s hard to see the forest because of the trees. You’ve likely heard that truism before as it applies to many situations, including business application and manufacturing processes. This also is true for Cloud deployment. Because cloud technology is right in front of us, it can be difficult to see the total impact of this disruptive technology on the entire industry.
Cloud deployment is a game changer. It deserves its place in historic milestones along with steam power, electrical current, transistors, and micro-processors. Yet, it is still often misunderstood, even distrusted and rejected. The concept of wiring whole cities for electricity took some time to catch on too. However, the demand for progress prevailed.
Cloud computing is destined for that same universal adoption – pulled into the mainstream by unstoppable demands for agility. Current naysayers and skeptics will see the light—or be put out to pasture and their relevance questioned.
Manufacturers who have not investigated cloud deployment recently, should take another look. As data around adoption levels change daily, case studies and testaments to the benefits grow exponentially. Cloud deployment is the logical solution for several market drivers which simply can’t be overlooked.
Seven market drivers behind growing cloud adoption:
Digitalization. As manufacturers begin digital strategies, they often find that cloud solutions are a necessity for many components of digitalization, such as predictive analytics, Internet of Things connectivity, and tracking of data from sensors. The vast storage, flexible architecture, and accelerated implementation of cloud solutions go hand in hand with digitalization strategies.
Supply chain visibility. Manufacturers are learning they must look beyond their own four walls in order to compete in today’s global economy. Cloud solutions help create a smart supply network and integrated connection of vendors, suppliers, partners and contractors. The supply chain visibility becomes practical and easy to manage.
Acquisitions and divestitures. Many markets and industries are consolidating. This leads to a need for rapid response and launch of new organizations and business models. Manufacturers simply cannot go through a two-year implementation process to integrate the new organization to an existing on premise ERP. Cloud solutions require weeks, not years, for implementation, supporting rapid change.
Enhanced user experience. Today’s millennial workforce is also a factor compelling manufacturers to turn to the SaaS model. Because cloud solutions are continually updated by the provider, they tend to feature modern user interfaces and consumer-like usability.
Security. Many CFOs acknowledge they have limited capabilities for managing IT security. They prefer to let experts who focus their mass resources on security to assume this critical responsibility. It makes sense for manufacturers to focus on their core competencies and turn over the highly complex issue of security to organizations who specialize in best practices to keep data secure.
Limited cash flow. Following the Great Recession many manufacturers are cash-strapped and facing several infrastructure projects which have been delayed. Cash reserves may be depleted and credit stretched. This makes Cloud’s subscription model and lower Total Cost of Ownership (TCO) attractive to manufacturers who want to move forward with modernizing without the large capital commitment.
Skills gap. Manufacturers today struggle to recruit and retain right-skilled IT technicians. It makes sense, therefore, to let a cloud provider manage the hardware, servers, back-ups and upgrades. This frees the internal IT team to focus on more critical projects.
These seven market drivers, each compelling on their own, combine to create one very persuasive story for manufacturers. “Why wouldn’t you want to be in the cloud?” will soon be the typical response as more and more manufacturers acknowledge that keeping pace with change requires the agility of cloud deployment. Manufacturers who are still unsure about SaaS platforms, should take another look. The big picture will come into sharp focus for those who take an objective view.
Mark Humphlett is the Director of Industry and Solution Strategy, responsible for Infor manufacturing. He has more than 20 years of experience in technology, and more than 30 years in the manufacturing and distribution industry.
