Many proponents of cloud computing act as though they've just discovered the kind of cloud-type business processes that organizations have, in fact, been tackling with various degrees of success for many years. These advocates also maintain that cloud is a technology driven new wave that, while bringing new business opportunities, is mainly about scaling up infrastructure in data centers, with the obvious advantages of access to latest technology, elimination of in-house servers and so on.
But the technology itself, while obviously vital, is really a sideshow to realizing the business transformation efforts that enlightened organizations have been striving for over the last 20 years or so. As Walter Adamson, an Australian-based consultant, comments: "Clouds are about ecosystems, about large collections of interacting services including partners and third parties, about inter-cloud communication and sharing of information through such semantic frameworks as social graphs."
Transformation vs. utility
This, he adds, is clearly business transformational, whereas "computing services that are delivered as a utility from a remote data center" are not. The pioneers in VANS/ED I methods- which are now migrating into modern cloud systems in offerings from software firm SAP and its partners, for example - were able to set up basic trading data exchange networks, but the cloud transformation now is integrating, in real-time, the procurement, catalogue, invoicing and other systems across possibly overlapping and much wider business communities.
Likewise, companies struggled for a long time with mobile and remote access to sales and marketing systems, as enterprise integration was often very difficult and expensive. Now the transformation brought about by cloud ecosystems such as the Salesforce.com community is enabling far more than a mobile quotation system with data that a rep had to download using a modem before he or she set out for the day.
And clearly, there are many individuals and companies, especially small firms, that have happily taken to one of the world’s most complete cloud experiences, Amazon Web Services, which is enabling many to move from a static website to a fully-fledged online global shop, with everything from database management to micropayment handling. And Amazon is also a frontrunner in the enterprise 'private cloud', with major software vendors including Oracle and SAP- now on its infrastructure offering.
But is that offering business agility beyond the IT side? A recent Business Week article, 'The cloud: battle of the tech titans', looks at Amazon vs. the rest and focuses pretty much on the scale argument, with users renting server time to analyses sales data, for example. But it does note that time to market is a major pull.
The city of Miami, for example, has quickly built a service that monitors non-emergency calls. "Local residents can go to a website that pulls up a map of the city and place pins in every spot tied to a complaint. Before the cloud, the city would have needed three months to develop a concept, buy new computing systems (including extras in case of a hurricane), get a team to install all the necessary software, and then build the service." Such systems are unlikely to be built in the 'conventional' way in these cash-strapped days.
Good use of a private cloud- this time on Google Apps- is by food chain EAT, which is improving business processes by using Google Talk for instant messages between stores when one run outs of a popular sandwich, for instance; Google Forms for head office to survey shop managers to capture issues and ideas; and integration with smartphones, for managers to access documents and order stocks on the move, and to oversee a number of restaurants while being stationed at one.
The received wisdom about such business cloud applications is that vendors are approaching business department heads, not IT managers, to make sales, although not much enterprise software of any type has been sold this way since the dot-com crash.
It certainly makes sense in one of the hardest functions to crack, the salesforce, which has long put up resistance to clunky CRM (customer relationship management) systems foisted on them. Just because Salesforce.com's CRM system is cloud-based does not mean it does not have the adoption problems that CRM has suffered from - incentives and good management tend to fix that. But a cloud system can greatly help with business change in hard to reach parts of a firm.
In many companies there is a black hole of forecasting and pipeline data on sales and it doesn't help that most major enterprises - certainly in the FTSE 100 -are led by CEOs with no sales experience. It's an area tailor-made for the cloud since so much knowledge is in silos- around departments and in the heads of salespeople - and best practice is not shared.
Fast forward for sales
Phil Codd, chief markets officer for northern Europe at software testing firm SQS, chose Salesforce.com to solve a major sales reporting problem- in the past, reporting was on an individual country basis with a complex mix of spreadsheets, emails and word of mouth which placed a lot of pressure on accurate and timely sales forecasting.
Codd took advantage of Salesforce. com's 30 day free trial of its Sales Cloud 2, and then worked with consultancy SaasPoint to implement it in just 40 working days- and the company now has a central repository of sales pipeline throughout the region in real-time, and all sorts of new opportunities for sharing sales best practice and leads by using tools such as Salesforce.com's Chatter, an internal social media system.
Anything that produces more than the sum of a notorious\y .self-sufficient group of reps is more than useful and it's hard to underestimate what this can do for a company - Larry Ellison, the colorful boss of software giant Oracle and now a cloud convert, famously cracked the whip a few years ago when he realized he had no 'dashboard' to see what his business units were doing in a timely fashion round the world -and got it done, of course.
In-house not an option
Trying to build an in-house systems to do this is obviously counter-productive in time and money for most companies that are not of the likes of Oracle. And where Salesforce.com also scores is in its brilliant decision to create the AppExchange platform where users can integrate and use many more functions, from an 800 long list, and that's apart from Salesforce's own extras.
Another function that's benefiting from cloud 'agility' is logistics, where provider Deltion is gaining a good deal of success for its CarrierNet platform. Managing director Denis O'Sullivan, himself a logistics expert brought in to run this UK firm a year ago, says logisticians have been 'crying out' for a long time for real-time visibility across the supply chain to iron out customer service problems, which he says Cadbury (now part of Kraft) is doing with CarrierNet, a cloud system.
Keith Newton, customer logistics director at Cad bury says: "The implementation has enabled us to move from a series of unlinked systems to a web based interfaced solution that has totally eliminated a number of areas of failure. It links all internal logistics and planning teams at Cad bury, all tier one third party logistics service providers, all second tier hauliers subcontracted to them, and customers via alerts, SMS and emails. "It is no coincidence that since implementation we have recorded a number of '100% customer service days', which is a significant achievement for a large FMCG firm such as Cadbury."
For which read - if the truck breaks down and no one knows, the kids don't get their chocolate. O'Sullivan adds that large retailers are also in the market for his system -which again would be prohibitive now to try and build in-house -and also mentions a client called Rigid Plastic Containers (RPC) which uses CarrierNet to check warehouse stock and production schedules before processing transport orders. If there is no warehouse stock, the system checks if the ordered items will be produced in time for dispatch. If there is a potential problem, an exception alert is raised and the problem managed with the customer.
Logistics examples are significant because they often involve the ecosystems that promote more business transformation across partners- adding real-time bidding systems to take on jobs, for example, is another feature O'Sullivan mentions that a client is doing. An ecosystem also becomes apparent within companies as they use cloud systems for human resources.
In some cases, it is certainly the case that cloud technology creates a new business agility opportunity. In others, it's enabling better a known need.
More business applications in the cloud
- Human resources (HR) systems are not obvious targets for the cloud but vendors such as Success Factors are proving that properly managing the entire workforce in terms of skills, knowledge and structure can have a big impact on business performance. European users such as construction supplier Hilti are big fans.
- The public sector has much to gain from the cloud- in the NHS, County Durham and Darlington Foundation Trust, a consortium of ten organizations, is using Wax Digital's web3 procurement system to make it easier for staff across the consortium to select goods and services for purchase and place orders quickly and simply, enable streamlined financial control and authorization, and accelerate the supply process to nearly always 'next day'.
- Project management is a shoo-in for the cloud, as Vodafone is discovering with the Project place web-based communication Business Change systems. "Finally we have a central system for storing files, working on them and retrieving them, always in real-time. Any project member can access it, and most importantly, the latest version is always available," says Alexander Gottschlich, global programme manager at Vodafone.
- The Green House, a small Northampton based business specializing in environmental services, manages around 500,000 scheduled collections a year through its recycling division alone. In the past, all of these transactions would have been carried out manually. Issues were typically sorted out over the telephone with multiple calls routinely taking place between the company, its suppliers and clients. This was a time-consuming, resource-intensive and expensive process. Today, the company manages all of these collections through Salesforce.com's Service Cloud, into which it has integrated a large number of workflows and approval procedures.