It’s touted as the greatest technology shift since the internet, yet the cloud isn’t necessarily the right choice when it comes to achieving real business benefits.
Proponents of cloud platforms and services point to flexibility, reliability and cost reductions as key reasons for their adoption. They argue that renting access to computer and storage resources is far better than investing in your own hardware and software.
However, when it comes to deploying complex logistics software applications, using a cloud platform or service may not be the best solution for your organisation. Implementing the software on-premise, or on your own hardware in an external hosting centre, is likely to deliver much better results.
Key reasons the cloud may not be the best option for complex logistics applications include:
A key selling point for cloud platforms is that you no longer have to worry about the physical servers that underpin them. Most users don’t even know, or care, where the data centre happens to be in which their data is stored and applications are running.
While this may sound appealing, it also raises the issue of security. How can you be sure the servers on which your business now relies are secure when you don’t even know where they are? How can you implement the stringent protection tools that you have in place internally?
Any cyber-attack that causes disruption to your ERP software will have a significant impact on business operations. Relying on a platform where you cannot control security is a risky decision.
No two businesses operate in exactly the same way. For this reason, software deployments have to be customised to ensure they meet an organisation’s unique requirements. Unfortunately, however, cloud-based software solutions can’t be customised. While they may offer numerous features, you can’t add anything extra to them. If a particular feature or capability that you require is not there, there’s nothing you can do but wait and hope it appears in the future.
On-premise or hosted software deployments provide the option to develop and add new capabilities as they are required by the business. An organisation’s needs change over time and the support needed from a software system changes, too, so having the ability to make those changes is vital.
Cloud vendors say their platforms are less costly to use than investing in on-premise hardware and software. While this may be the case for small businesses, it’s not always true for mid-sized and larger organisations.
Purchasing access to a cloud-based logistics software system on a per-user basis may seem initially to be cost-effective, but this changes over a longer timeframe. A better approach is to purchase your software under a lease payment agreement. The monthly payments may be slightly higher but, after four years, you will own the software licence outright. If you had opted for the cloud service, you would own nothing and the payments would have to continue for many more years.
Having your software running on-premise or in a purpose-built hosting centre ensures you have access to it at all times. This occurs via your local area network if the application is in-house or via dedicated VPN links if in a hosting centre.
Cloud-based software services, on the other hand, must be accessed via the public internet. This means any disruptions to internet connectivity mean downtime for your business. It’s another factor that is out of your control.
Cloud software service vendors highlight the point that you will no longer have to manage the physical hardware supporting your software, but this may not be as big an issue as they’d have you believe.
Management of on-premise hardware can be handled by an IT services company under a fixed-price contract. This allows equipment to remain within the organisation, without being an ongoing burden for IT teams.
The cloud clearly has benefits for certain areas of business and its use will continue to grow in the years ahead, however, it’s certainly not be the best option when it comes to complex logistics operations. Make sure you have considered all the factors and options before deciding which option to take for your next deployment.