The 5 Risks of Delaying Migration to the Cloud
By: Dan Johnson
There has been so much written about the benefits of migration to the cloud that it’s puzzling why there are still any number of companies that delay doing it. The cloud provides the opportunity to virtually eliminate capital investment in IT infrastructure, and that’s just for starters. There’s also the human resources the cloud frees up from systems operation and maintenance, not to mention software purchases and upgrades are no longer needed. So why the delay?
Some cite security concerns. Others claim their business or manufacturing processes are so unique or proprietary that they can’t see how the cloud could possibly provide the same level of customized functionality they have with their internal legacy system. They unknowingly suffer from “terminal uniqueness” – a condition that paralyzes business owners or managers and prevents them from migrating to the cloud because they are convinced their IT situation is singularly unique and impossible to duplicate.
Cloud adoption, however, is making significant advances in some business areas such as human resources, customer relationship management (CRM), and marketing. Where cloud migration lags is in finance, order entry/execution, and production. Some of this can be attributed to security concerns. A larger issue is that ERP and supply chain management (SCM) software developers have not yet delivered comprehensive SaaS applications for complete ERP/SCM functionality. This is perhaps the greatest current obstacle to cloud manufacturing adoption. However, there is a footrace going on right now between the major software developers to bring SaaS solutions to market, so this situation will change quickly as SaaS ERP and SCM solutions become more readily available and manufacturers quickly adopt them to reap their significant benefits.
The risks are substantial for those enterprises that hold back from migration to the cloud, from both an operational and competitive standpoint. Five major risks of delaying migration to the cloud include:
1. Opportunity limitations
Companies tied to legacy on-premise systems are transformationally hamstrung. The cloud provides the agility to take advantage of sudden business opportunities. The cloud makes finding and retaining the best possible human capital easier as well. The most talented workers want to use the latest tools and not waste time and energy learning a legacy system limited by whatever technology runs it. The cloud enables enterprises to adapt and utilize the latest technologies to gain new efficiencies and encourage continuous improvement.
2. Ongoing infrastructure costs
An on-premise IT infrastructure keeps the opportunity to grow the business in the hands of the IT department. And once an investment has been made in infrastructure, it’s hard to let it go. Networks and data centers are expensive, and IT is reluctant to give them up. But expenses continue with every passing day, including electricity, software and hardware upgrades, maintenance, and staffing, to name a few. The cloud alleviates all those issues and enables management to invest elsewhere, where the money can bring more value to the organization.
3. Delayed competitive response
The Internet and social media have fundamentally altered the commercial landscape. Facts and opinions crisscross the Web instantly. Consumer trends come and go with lightning speed. Disruptive technologies can blindside an unsuspecting brand and turn it from being a market leader one day into a has-been the next. To maintain a competitive edge, no matter what your business, requires the agility, flexibility, and scalability that can only be found in the cloud.
4. Business continuity issues
The business world runs on data. Nothing is more dangerous than service disruptions that can cause an IT ecosystem to grind to a halt because an on-premise data system has been compromised in some way. The cloud provides a safe, efficient, and flexible way to disperse IT assets and redundancy across the country – even around the world -- minimizing the possibility of service disruptions.
5. Resource drain
The modern, successful manufacturing environment is all about efficient use of resources. Operating an in-house IT infrastructure, especially in a larger enterprise, can be a considerable drain on resources, including personnel, space, power, heating, cooling and the money required to maintain it all. Moving on-premise IT systems to the cloud is a quick and economical way to save resources.
Migration to the cloud for most manufacturers should be a question of “when”, not “if,” and the sooner the better. Many of the benefits for manufacturers are the same as for non-manufacturing companies – streamlined ordering and procurement, faster process implementations, improved data collection and analytics.
If your company’s not already planning its migration to the cloud, it’s time to get moving.