There comes a time during the discussion about implementing a new Supply Chain Planning software when the question gets asked “Cloud or on-premice?” This is typically when the Supply Chain team decides to stretch their legs and go and get a coffee as that’s a decision for IT and Finance…
In the past, this would have been a sensible decision, as there were only two real options for how you were going to run the software. The most common way was to do it ‘on-premise’ i.e. buy a new server (or dust off an old one that was lying around…don’t laugh I’ve seen it done) and install the software on there and maintain it in-house. The second way was to have it ‘hosted’, which is basically to rent a server off someone else so they look after the hardware, but ultimately you are still responsible for the software. Not many organizations went down the hosting route as it doesn’t actually free up any IT resource – it just means you still have to manage the software AND the relationship with the hosting company.
However with the advent of true Cloud computing, now there is a third option that gives the best of both worlds. Deploying your APS through the Cloud (as opposed to just hosting), provides benefits across the organization not only in IT and Finance but also within the Supply Chain team as they are using the latest and best version of the software.
Cloud is all about the Money
We all know the difficulty of getting a project off the ground and raising a CAPEX to pay for the new hardware. As technology moves on, or as you are growing rapidly through new markets, products, or acquisition, the need for upgraded hardware to run the software better and faster means you could be repeating the CAPEX cycle every 2 to 3 years. Not a proposition that anyone would look forward to! However, as Cloud is paid for on a subscription basis, there is no big upfront cost. Plus it is fully scalable so as your needs change it’s simple to add additional hardware to increase performance and benefit from the latest technology.
No more Outdated Supply Chain Planning Software
When it comes to using the system, all reputable Supply Chain Planning software vendors have a software release cycle to add new features and improve the user experience. However, when the software is deployed on-premise, any upgrade becomes the responsibility of the IT department, and all too often the default position is “If it ain’t broke don’t fix it”. Whilst this does mean the system is usually stable and does the job, it also means that the new features, which save time and improve performance, are not being implemented. Remember that the APS, when used correctly, gives a significant return on investment and a competitive advantage by supporting your S&OP/IBP process. It helps you to forecast accurately to launch new products and manage promotions, effectively plan production and procurement, balance inventory, and improve customer service. Using the latest version of the Supply Chain Planning software with the latest features will provide the Planning team with the best set of tools to focus on doing these things that add true value to the organization.
The Cloud Allows you to Focus on Added Value Tasks
Allowing people to focus on adding value doesn’t just apply to the Planning department either. The maintenance of the hardware and software for the Supply Chain Planning software can be an administrative task that doesn’t add much value but does take up a lot of IT resources. The priority in most organizations is the maintenance of the ERP as this is the mission-critical system that is the backbone of the company. The experience and expertise within IT are rightly geared towards the ERP, and having another new system to understand and support eats into the limited IT resources.
By deploying the Supply Chain Planning software through the Cloud, the burden of maintaining it is passed over to the vendor so IT can focus on the core business of supporting the ERP and company objectives.
So next time you are looking at a Supply Chain Planning software or thinking about upgrading and the question gets asked about the hardware, don’t be tempted to leave the room and grab that coffee. Think about the Cloud and how it can add value to your business, free up time, and as we say; Connect, Deploy, and Enjoy!