In the business world, you hear many interpretations of what “the cloud” truly represents for a supply chain. Software as Service. On Demand. Business Process Outsourcing, etc.
When you discuss value, the response most often given by business leaders is cost, specifically no capital expenditures and only paying for what you use. Others think the value lies in the speed of deployment or resources needed.
Real Value or Benefits?
But are those the real values or just the benefits?
For those who appreciate true value, the cloud means information. Or better yet, information sharing.
In the old version of the supply chain, information sharing was as only as good as your Enterprise software system. And that wasn’t always good. Like a person who tells a story to one person who repeats his version to the next person and so on. By the end of the chain, the story was only remotely recognizable.
For years, and even still today, many supply chains operate, if you want to call it that, in similar fashion. The company sends a file; let’s say a purchase order, to a partner or supplier, who in turn, sends his version to another partner and so on. Thus, the PO says one thing. The packing slip says another and shipping notice yet another. Now imagine this issue in a global context and the cost and effort to get everyone on the same page.
Massive Information Exchange
It’s not entirely the fault of original ERP, which was designed to focus on mostly transactions and process flows inside the company. But it wasn’t necessarily designed to support the massive information exchange that global commerce now requires.
This is where the real value of the cloud comes in. Information that should be shared among suppliers, partners and other companies both upstream and downstream needs a place where it can be shared. A place where it exists. It’s more than just sending a purchase order or an invoice across an electronic platform. In the cloud, the platform becomes the intercompany transaction system of record. It can be tracked, recorded, captured and is accessible to any partner in the network. All of whom can get to it quickly and easily – in one place.
Whether it’s a shipment, invoice, purchase order, payment and on and on, the visibility and easy accessibility of the cloud ensure that errors and “different” versions of the story are much less likely to happen as each of the supply chain partners access the information. It is the information center of your supply chain for transactions that happen outside your company walls.
Providing Valuable, Hard-to-Get Data
Yes, your ERP is not going to go away, it is after all, your original system of record, but once information such as a purchase order is pushed outside the company to suppliers, service providers and partners, the data that drives logistics and payment processes may not and often isn’t captured by your ERP. This is why the ability of the cloud to provide valuable hard-to-get data such as status of the order while it’s being worked and fulfilled is vital. Whether it’s a packing list, shipment notice or an invoice, it all needs to be captured and tracked, and more importantly, accessible to all the players in the chain.
That’s the cloud’s most salient feature and the reason it’s starting to gain serious traction in the business world. The cloud doesn’t only enrich the company that employs it but the compnay’s community of suppliers, service providers and partners around the globe.
