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Cloud computing continues to rise in popularity as cloud-based technologies play a critical role in businesses by creating new competitive advantages. To start off, what exactly is cloud computing? The U.S. National Institute of Standards and Technology describes cloud computing as “A model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

To go a step further, cloud computing can be broken down into three service modes:

  • Software as a Service (SaaS): SaaS is a software licensing and delivery model where a fully functional and complete software product is delivered to users over the web, usually on a subscription basis. SaaS offerings are usually accessed by end users through a web browser and can be billed by consumption, or simply with a flat monthly charge.
  • Platform as a Service (PaaS): PaaS is a cloud service model where the cloud is used to deliver a platform to users from which they can develop and manage applications. PaaS usually offers a base operating system and suite of applications and development tools. The platform eliminates the need for organizations to build and maintain the infrastructure traditionally used to develop applications.
  • Infrastructure as a Service (IaaS): IaaS provides pre-configured hardware resources to users through a virtual interface. Unlike SaaS and PaaS, IaaS does not include applications or even an operating system, but it simply enables access to the infrastructure needed to power or support that software. It involves outsourcing the equipment used to support operations, storage, hardware, servers and networking components.

Most individuals in the IT industry understand the impact that technology can have on a business, but considering some of the statistics on the growth of cloud computing and predictions for the future is mind-bending.

  • IDC predicts that worldwide revenue from public cloud services will reach more than $195 billion in 2020, which will be more than double the $96.5 billion in revenues forecast for 2016.
  • Gartner states that by 2019, more than 30% of technology and service providers’ software investments will shift from cloud first to cloud only.
  • Cisco notes that by 2020, 92 percent of workloads will be processed by cloud data centers; 8 percent will be processed by traditional data centers.

With this type of growth, it is clear to say that the cloud represents the next “Big Thing” in the IT world. So what is the reason behind the dramatic growth predictions? The answer lies in the following key characteristics that outlines the key benefits that cloud services can provide:

  • Flexibility: The cloud is ideal for business with growing or fluctuating demands. It is very easy to scale cloud capacity up or even scale down again, if needed. The level of agility can give business an advantage over competitors.
  • Document Control: Cloud computing stores files centrally and allows multiple users to access files at the same time. Before, employees had to send files back and forth as email attachments to be worked on by one user at the time. Allowing multiple users to access and edit shared documents at the same time increases collaboration among workers.
  • Work from anywhere anytime: The cloud allows users to access data no matter the location or time through simple internet access. It even goes a step further offering mobile apps reducing restrictions on the device on hand.

Due to these benefits many procurement and supply chain companies have already seen the impact that cloud computing can have on their organization and adapted the use of the cloud. A few major additional impacts that a cloud-network can have on supply chain and procurement are shown below.

  • Stronger communication between partners and suppliers
  • Increased buyer-supplier collaboration
  • Single view to manage global transportation
  • Forecasting and planning demands
  • Database management

A cloud based network allows partners and suppliers to exchange and share information under one centralized platform for increased collaboration and communication. Additionally, the ordering process can be streamlined through increased buyer-supplier collaboration that can enable inbound-plant visibility and even provide a single view to manage global transportation. Most importantly, if any adjustments need to be made through the process, it is easier to do so and full visibility will be available as to where shipments are. For these reasons and many more the cloud has become a hot topic among many business, including procurement. The evolution of the cloud and the technology that it offers can revolutionize the supply chain and procurement industry.

Dejana Dosen

Dejana Dosen is a Project Analyst at Source One Management Services, LLC where she helps companies reduce costs by executing strategic sourcing strategies. With a background in Information Decisions Sciences and Business Analytics, Dosen enables companies to make smarter purchasing decisions by leveraging data to derive actionable strategies. Her categorical focus includes Supply Chain and Marketing.

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