10 Considerations for Putting Your Supply Chain in the Cloud

10 Considerations for Putting Your Supply Chain in the Cloud

Now that cloud computing has officially arrived in the mainstream IT world, practitioners in different industries are racing to figure out what it means. At its most basic level, cloud computing is a technology service delivered over the Internet, which is always on, ubiquitous, global, and connected to just about every PC, iPad and smartphone on the planet.

Cloud computing has huge implications for supply chain management. The supply chain is an inter-company, business-to-business world that hasn’t yet realized the full power of technology innovation. This is primarily because traditional business software is designed to work within single companies, not between companies.

Look what Facebook did for sharing information with friends: A new vacation picture posted once, and every friend sees it instantly. Imagine that same concept in the supply chain, only instead of a vacation picture, it’s an inventory status event where every partner and stakeholder gets the news instantly. This is cloud supply chain.

Here are 10 things to consider when moving your supply chain into the cloud:

1. Start with visibility.
Before you start automating processes, turn the lights on and identify your supply chain’s problem areas. With that visibility “spinal column” in place, you can start addressing business process pain points based on what’s actually happening in your supply chain.

2. Don’t overlook the network.
A cloud supply chain platform is more than applications. Applications need data and must be tightly integrated to an existing network of supply chain partners. This is more than an EDI VAN hub. The information processing must reside in the center of the network alongside the applications so each file can be opened, rationalized and linked to form intelligent business objects.

3. Look for an active customer community.
Cloud technology customers have become much more than typical software company user groups because they all share the same platform. User communities who are actively working as a group on things such as data quality and partner relations are rapidly becoming industry influencers because they speak as a collection of major shippers. In supply chain management, where companies often share a small, common set of partners (carriers and 3PLs, for example) this can be powerful.

4. Walk before you run.
With cloud computing, you will often find entry-level packages that allow buyers to start small and then add capabilities and partners to their platform as they expand the scope of the solution.

5. Understand the data quality approach.
Software applications are only as good as the data that feeds them. Cloud computing is no different. However, a cloud supply chain provider should have a common data quality monitoring and improvement process for its customers. Because all customers share the same platform, a common process means the work of any one party actually benefits everyone on the network.

6. Look for real momentum and market traction.
One quick way to identify success is to go to the press release page on the vendor Web site and look for customer announcements. If there is little or no customer public relations, there’s a good chance the vendor is new to cloud computing or has not been successful. PR doesn’t happen if a customer is dissatisfied.

7. Is it a single instance, multi-tenant model?
Most of the big software companies have announced cloud offerings. These are mostly dedicated instances of their software that they will deliver as a cloud service. Although this approach has IT benefits over installed license software, it usually means the buyer still faces building out their own partner network and dealing with data quality on their own. The power of cloud computing is in the shared network data model, which only happens with a single instance, multi-tenant model.

8. Change management doesn’t go away.
Although many of the difficult IT deployment problems will be reduced, good, sound change-management principals still apply to cloud deployments. Supply chain automation can impact thousands of partners. Corporate IT and consulting partners can play a vital role in a successful cloud supply chain rollout.

9. Make sure you’re satisfied with the security approach.
Skeptics often point to data security as a key reason to avoid cloud computing. In reality, cloud providers have strong and effective security systems and processes in place. Their business depends on it. Cloud vendors are well-prepared to answer the tough questions around security and data integrity, so don’t be afraid to ask.

10. Augment existing software systems
The emergence of cloud doesn’t immediately spell the end of existing software. Companies aren’t ready to write off their massive software investments, and it’s not really necessary. Cloud supply chain solutions are designed to integrate with (and communicate with) all types of include supply chain partners and their systems.

Greg Kefer is director of GT Nexus corporate marketing in Oakland, Calif. Contact him at keferg@gtnexus.com.