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Switching to the cloud – Changing the focus from operational to strategic

According to Accenture, 67% of CIO’s want to position Information Technology (IT) as a strategic asset that will help the business grow through the use of innovative technology, products, or processes.  The challenge is the traditional mid-market IT department is structured around managing and controlling IT assets such as servers, performance management, and risk avoidance tasks like backup and DR.  This creates an environment that lacks focus on IT being an asset for the rest of the organization to innovate alongside.

Today’s IT department needs to pivot their role into agile and strategic services.  They should be innovating alongside business leaders in Operations, Marketing, Sales, and Finance to provide unique solutions for their internal customers and external customers.  Traditional on-premise solutions are a barrier to this agile innovation.  For example, the company wants to determine if a new mobile app for their sales staff would increase sales productivity and close rates.  In a traditional environment, the IT department would need to determine the hardware infrastructure required to support the messaging and integrations, the communication channels, the security and audit trail of transactions, and monitoring of the data.  The setup of the baseline architecture could take weeks to months before development of the app could begin.  In today’s cloud-based world – a simple Azure deployment of Azure Event Hubs is used to receive communication from the mobile device, Xarmin. Development in the cloud could deploy to iOS, Android, Windows Mobile, and all servers could be procured in less than an hour.  This changes the focus of IT to provide rich Proof of Concepts (PoC) in a rapid fashion to prove out business cases for the larger deployment.

“88% of 1,300 companies determined cost savings and 56% agreed cloud services helped boost profits” – CIO Magazine

In another scenario, we can take the case of ERP and CRM in the cloud.  One of the traditional challenges of on-premise has always been performance tuning, hardware deployment, software installation and configuration, on-going backup, and DR maintenance.  In addition, every upgraded version, typically released every six months, would be heavily scrutinized due to the cost, time, and impact to the business.  Thus, you may end up with old outdated ERP solutions that does not play well with the technologies that will allow your business to grow.

“62 percent of the companies that have saved money are reinvesting those savings back into the business to increase headcount, boost wages and drive product innovation”– CIO Magazine

Today, by deploying into the cloud you will be auto-upgraded every six months to the latest and greatest features and capabilities.  Your Disaster Recovery, backups, and Server Performance are managed on your behalf.  This frees your IT department to focus on value-added business process improvements, and innovative solutions that strategically enable the business vs. support the base operations.

In summary, a move to the cloud benefits organizations.

Greater Insights & Decision Making

The world we live in today requires an agile approach.  Customers behaviors are changing rapidly, and their demands are influenced by expectations from their day to day life from companies such as Amazon, Uber, and AirBnB.  To serve them more effectively, you will need analytical data insights into their behaviors with your company, and the ability to rapidly adapt.  Data is constantly being updated within the cloud, as well as being processed at a much more rapid rate. With the cloud, your organization can take advantage of auto-scaling – something an on-premise environment would never allow for in the past.

Reallocation IT to Strategic Tasks

To stay competitive in today’s business market, your business needs IT teams time focused on strategic projects providing added value to the business.  By moving to the cloud, hours previously spent on management of hardware, software tuning, performance tuning, maintenance, and backup can now be allocated elsewhere.  Just imagine if your IT team had 50% more allocation to dedicate to tasks such as Mobile development, advanced analytics, and enhancing your customer experience.

Reduce Total Cost of Ownership (TCO)

There is a myth that the TCO of cloud-based ERP/CRM is more expensive than the on-premise version. In fact, analyst firms such as Forrester and Gartner have shown that over a 3-5-year period they are less expensive.  There is no doubt that your spend will move from CAPEX to OPEX, however, the efficiency of not having to move between multiple On-Premise solutions increase the productivity of employees by as much as 45%.  The reduction in costs such as DR, Backup, Maintenance, Security Management, Performance Management, as well as hard costs such as electricity.  To get an idea of what you could save check out the Microsoft Azure TCO calculator.

Scalability and Agility as you Grow

For mid-market companies, globalization is becoming the norm. Thus, deployment considerations and performance management reaching geo-located sites can be a challenge in the on-premise world.  Geo-Replication of ERP/CRM in Azure gives your organization the ability to maintain a centralized instance of your data for access speed.  Finally, the cloud gives you the ability to auto-scale and managed unpredictable growth more effectively.  This takes the guessing away on when you should invest in infrastructure as this can be deployed automatically or manually within an hour.

Written by: Tim Harris • VP of Strategy & Solution• Arbela Technologies