Embracing Cloud Hosting Benefits
Cloud Computing: Altering Logistics and Supply chain industry
As a business-owner officer, cloud vs. internal-hosted computing comes down to application reliability, security and total costs of the operation. The Army & Air Force Exchange Service has embraced reviewing cloud hosting opportunities when it makes sense and has deployed it on occasion. From a cash-flow basis, upfront outlay is clearly avoided, and because the Exchange is a retailer with seasonal waves in demand, we can scale up and down and pay for what we need, when we need it, versus scaling internally to peak usage throughout the year. We minimize the latter through virtual servers, but planning for those peak loads that come only a few months out of the year can be suboptimal if internal horsepower is not correctly managed.
Another major benefit with cloud is staying current with software version upgrades, as long as the business can temper the appetite to customize. A challenge arises at times when a new application is vetted to solve a business opportunity. When defining the business requirements, there are differences between the software and how we’ve always done it, and something has to give—customize the application, which adds costs and the potential to fall behind future version upgrades, or adapt the business process to the new application. The Exchange has incorporated a robust change management process to vet these issues and balance the need versus the cost.
Cloud versus internal hosting is not an issue. The Exchange’s business units rely on the technology to be there when running the business, and IT’s role is solving for the most cost effective means in accomplishing those ends.
Technology: Mitigating Supply Chain Costs
Technology is not an end all, but it’s viewed as an enabler. First, the need is identified, then the technology is sought to optimize the business opportunity. When warehouse management, transportation management, buying and replenishment, e-commerce, point-of-sale, and business intelligence systems seamlessly integrate, maximum visibility is achieved and affords the business the opportunity to identify areas where costs can be reduced or unnecessary ones eliminated.
Strategize to Use Big Data Analytics
Most organizations are data rich but information poor. Lots of data is gathered, but what information is gleaned from that data can be a challenge. It’s important to look at what information is gathered and then develop strategies to meet those requirements.
Changing Roles of Tech Decision Maker
The role of the CIO in the Exchange is changing as well. It was once primarily a service provider to business units and is increasingly becoming a partner with them. Our IT organization is moving from merely delivering technology that meets requirements developed by a business unit toward partnering with them to jointly develop solutions to business needs.