Why is cloud becoming so increasingly popular with manufacturers? Perhaps it has something to do with the fact that manufacturers are looking for ways to improve the efficiency of new product introductions (NPIs). Getting to market faster, easier, smarter, and more affordably are keys to success, especially in a competitive market where opportunities appear and disappear at the drop of a hat. If you just convinced your business to invest in a cloud solution you’re obviously not befuddled, because you’re aware these challenges also drive demand for the benefits of cloud solutions:
- IT management of on-premise solutions and fake clouds can compromise a manufacturer’s agility, bog them down, and distract them from becoming more return on investment (ROI) -focused on its core business.
- Dissemination of critical data—including bills of materials (BOMs) and intellectual property (IP)—across an increasingly complicated network raises the risk of security breaches, product errors, and delayed time to market.
- Mobile and portable devices require a solution architecture that’s deliverable 24/7 at world-class service levels.
- A “flat world” (a level global playing field without geographical, balance sheet, or technology borders) increases the need for solutions that can scale efficiently to enable manufacturers to take advantage of global market opportunities.
- Global distribution of a supply chain workforce challenges the proper alignment of people, processes, and overarching business goals. This can result in potential miscommunication, product revision coordination, and control issues.
Despite the fact that a greater number of manufacturers are embracing the cloud to maximize their IT budget and return on investment, many competing product lifecycle management (PLM) providers still see cloud as a hazy virtual concept. It’s not. On-premise cloud virtualization sacrifices cloud-based economics, shifts business risks back on the manufacturer, and weakens scalability.
As more companies realize the benefits of cloud, more fake cloud providers have appeared that are eager to exploit the naïve. The true promise of a multi-tenant cloud PLM solution includes the following: cost savings by removing IT expenses, simplifying implementation, scalability, increasing security, and providing a faster path to ROI.
One of the top benefits of cloud is enabling accessibility and mobility. With cloud applications, supply chain teams can access e-mail, documents, and BOMs from anywhere in the world over a secure internet connection. Because employees, partners, and contractors have remote mobile access to information outside of the traditional firewall, and have it whenever they want, processes are streamlined with greater efficiency than can be expected with an on-premise solution. Streamlined processes and tasks, in turn, allow companies to focus more on innovating and developing new products.
With cloud computing, there are no up-front capital costs needed for servers, hardware, and data centers, as is the case with on premise solutions. A cloud service provider charges less for energy than you’re spending on your own data center. Consider these statistics: In general, only 15% of on-premise servers are ever utilized, with operations accounting for 30% of total data center costs; plus, power and cooling are usually responsible for an additional 30% of costs.
And finally, cloud offers customers a distinct security advantage over on-premise solutions and charlatan cloud solutions. Once considered a security liability, cloud—with upgrades, updates, backup, and security patches managed by experts—is now considered a superior security option compared with many on-premise solutions.
Congratulations. You’re now armed with information to convince your business to invest in a cloud solution, thus forgoing the costly infrastructure and resources needed to maintain on-premise software. You’ve just eliminated the opportunity cost of managing an on-premise solution, enabling your company’s precious human capital (namely engineers) to focus on critical core business activities like designing new products.
Are there any additional benefits you have found from going to the cloud? Let us know in the comments below.