There's naturally a lot of debate these days over what types of applications should run in the cloud versus which need to run on premise. Much of that debate is focused on performance issues. But in reality there is also a class of collaboration applications that, because of their very nature, are better off deployed in the cloud.
Supply chain management software is a good example. A company's supply chain can involve hundreds if not thousands of companies. To get a complete picture of its supply chain and the attenuated risks, a company needs a central location through which it can view and analyze all the relevant information about its suppliers.
For over the past decade, GT Nexus has been making that case for a namesake supply chain application that is delivered using a software-as-a-service (SaaS) deployment model. According to Greg Johnson, executive vice president for marketing for GT Nexus, a SaaS model not only makes it easier for a company's suppliers to become part of a supply chain, it gives companies greater flexibility from an IT perspective when it comes time to swap out one supplier for another. Given the state of the economy and the occasional natural disaster, Johnson adds, that is an event that is becoming more common with each passing day.
Johnson also notes that companies that more aggressively manage their supply chains routinely drop more profit to their bottom lines. For example, The Aberdeen Group recently found that the average $1 billion company can free up $10-$40 million in cash through global trade process improvement and automation. It's hard to accomplish that goal, however, if all the required information is dispersed across any number of enterprise applications running on multiple on-premise systems.
When you get right down to it, supply chain applications are really a special class of collaboration software that brings together thousands of people working in hundreds of companies. All it takes sometimes is for one event to trigger a series of cascading processes that most companies today can't see coming because the on-premise software they are using simply doesn't provide the business visibility the company needs. This is why so many companies are ill-prepared to deal with sudden events that seem to always create shortages of critical components that wind up costing the company money in lost sales.
Because of those issues, Johnson argues that cloud computing provides the only real vantage point from which companies can see how one event is going to not only affect the sustainability of the company, but also how they might actually profit because of it.