The Benefits of Running Your Business Software in the Cloud: Strategies for Success
With the economic recession behind us, markets are poised for growth yet again. As fast-growing companies achieve greater market penetration and gain more customers, they face the challenge and opportunity of expanding to new locations and efficiently growing their business. They must be able to effectively manage their sales teams and channels and improve back-office efficiency, while ensuring high levels of service for customers.
To take advantage of these opportunities, companies need to assess whether their existing business applications footprint for accounting, sales, service and other functions will effectively support the growth of the business. Many businesses that started out with ad hoc, standalone applications will determine they need to upgrade to a more flexible platform to support continued growth.
Cloud computing is a compelling option for many small and mid-sized businesses
(SMBs), as well as larger enterprises, as it offers low cost of entry and ownership and faster time to market compared to traditional on-premise business software and servers. According to IDC, software-as-a-service (SaaS) solutions are set to grow six times faster than all software, and they’re expected to show compound annual growth (CAGR) of around 26 percent through to 2014.
Organizations that opt for a cloud strategy face an additional consideration—whether to use individual cloud systems for key processes such as finance, CRM and ecommerce, or use an integrated suite that covers those functions and more. It’s important to recognize that while the cloud model resolves many problems of on-premise software, cloud applications as standalone silos can introduce inefficiencies, integration challenges and IT and administrative overhead of their own.
The Risk of Fragmentation with Cloud Silos
Without integration among cloud applications, business users may still be forced to navigate multiple applications and data repositories of data for their everyday activities—slowing down processes and reducing the agility the company needs to grow. Consider the following implications of siloed cloud applications:
If multiple cloud applications are implemented, data fragmentation still exists. Overlapping databases must be consolidated and reconciled to create a comprehensive and consistent view. In effect, the on-premise software hairball has simply been transferred to the cloud. Each application has its own style of configuration. User efforts to adapt the software to their needs can be hampered as they try to keep track of multiple methods of configuration. Getting a comprehensive picture of how people are using the software is difficult because multiple applications must be monitored. End-to-end processes are difficult to manage because they must be integrated across multiple applications and databases.
One example is analysis and reporting. To achieve a reliable view of business performance, a company with six cloud providers would face a labor-intensive business intelligence task. It must pull the information from various sources, dump it into spreadsheets, and spend considerable time extracting, consolidating and ensuring integrity of data from multiple applications.