Why deploy SCM in the cloud?


The cloud is becoming one of the most important tools of our generation, and many enterprise organizations are using it to bolster their operations and improve flexibility within their supply chains. According to Gartner, cloud computing will comprise more than $1 trillion in overall IT spending from now until 2020. In fact, the cloud is expected to generate around $216 billion in 2020, an increase of almost double from the $111 billion in 2016.

Organizations are especially looking at using the cloud in their supply chain management operations. What are some of the reasons enterprises are making the move to the cloud? Let’s take a look:

1. Cost containment and reduction

One of the biggest reasons that any organization has for moving to the cloud is the cost benefits that come with it. Since cloud-based tools don’t require an upfront capital investment in hardware, it becomes a comparison of capital expenditures and operational expenditures – a comparison that often results in the latter being the least expensive option in the long run.

Inspirage’s recent Market Research Study found that 72 percent of business executives view cost reduction as the main reason for investing in cloud-based tools. In addition, according to Logistics Management editor Bridget McCrea, Gartner’s research indicated that 51 percent of logistics organizations are attracted to the cloud’s promise of lower total cost of ownership.

2. Ease of use

Another key reason the cloud is becoming the go-to in terms of SCM applications is the fact that it’s simpler to deploy and operate these kinds of tools. Gartner’s research vice president Dwight Klappich mentioned that companies are making the shift from traditional computing environments to the cloud for a few specific reasons. In fact, 80 percent of logistics professionals are already using or are considering the move to cloud-based SCM applications. Of that 80 percent, 56 percent of them said that the main driver for cloud-based SCM tools is that the software is easier and faster to deploy than traditional models.

Cloud-based solutions present an effective opportunity to increase flexibility, and many executives agree.Cloud-based solutions present an effective opportunity to reduce costs, and many executives agree.


3. Enables advanced analytics

S​upply Chain Digest contributor Dan Gilmore noted recently that because cloud computing allows for more advanced analytics within the supply chain, it’s a key trend to watch, citing a survey of executives that responded positively about the use of the cloud within their operations. Thirty-five percent of the survey’s respondents stated that they would be using the cloud for all or almost all of their supply chain software.

“Advanced analytics, in some but not all cases connected to ‘big data,’ offers new approaches to supply chain decision support, potentially upending, for example, traditional methods use for forecasting, and ushering in a supply chain world where companies will increasingly be able to predict potential problems or opportunities before they occur,” Gilmore wrote.

4. Increases customer satisfaction

Beyond the strict operational benefits of the cloud, there is a real advantage from the customer’s point of view, as well. For organizations that do turn to the cloud to improve their IT infrastructure and operations, they report that thanks to the advanced analytics and better collaboration between teams, customer satisfaction is going up. For instance, in today’s fast-paced business landscape, there is ever more pressure to get to market more quickly – with the cloud, this is becoming possible. In addition, because cloud-based SCM tools and data analytics allow businesses to make fewer mistakes and keep customers happy, it inevitably leads to fewer returns and billing disputes.

5. Drives profit margins

All of the aforementioned benefits form a yellow-brick road leading to this one: When customers are happier, they spend more money, which is great news for businesses. According to an Oracle report, businesses can see up to a 33 percent increase in new sales and 20 percent increase in profitability by moving to cloud-based SCM tools.

For the 80 percent of logistics professionals that are looking to incorporate cloud-based tools into their operations or have already done so, Inspirage has the solutions to make that a reality. Check out our webinar below on our recent Market Research Study, then get in touch with our experts today for more information about how we can get your SCM strategies started in the cloud.

Sandeep Thigulla | Key Contributor

Sandeep Thigulla possesses 12 years of project experience with Oracle applications and modules including Fusion Cloud Applications and the Oracle E-Business Suite (EBS), specifically Service Parts Planning (SPP) and Logistics, Customer Relationship Management (CRM), Supply Chain Management (SCM) and Order to Cash. He has successfully planned, executed, and monitored large complex projects with multiple clients globally. Industry experience includes high tech, retail services, manufacturing, and service industries. He is recognized as a leading expert for the Oracle Fusion Cloud Implementations within CRM and SCM.