Cloud computing to change procurement
Digital transformation is crucial to any modern organisation whether public or private. It is at the core of the digital single market to ensure global economies reap the socio-economic benefits of new technologies.
Cloud computing has potential to reduce IT expenditure and boost organisational agility while also improving the scope for delivering high-quality new services. Experts have defined cloud computing as storing and accessing data and programmes over the internet instead of your computer’s hard drive. Barriers to adoption of cloud services range from the shift to new procurement processes to match the cloud’s on-demand model, lack of trust and security, lack of mature technical standards, to complex legal terms and fear of vendor lock-ins.
Overcoming these barriers is key to boosting public sector productivity and efficiency, meeting a new set of user demands in a way that ensures services are secure, reliable and compliant with institutional requirements. As products grow more complex and supply chains become sophisticated, a dynamic, connected and inter-dependent supply chain ecosystem must be in place so as not to slow down time-to-market.
Bringing these products to the marketplace requires an efficient supply chain system. Many industry leaders are predicting a radical paradigm shift towards procurement and supply chain departments as a whole – moving away from complex ERP-built reporting tools and replacing them with new “app” driven user interfaces and cloud-based analytical platforms which let users purchase from enterprise app stores uninterrupted.
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Most of these cloud-based solutions are not costly and extremely reliable. They also facilitate sharing of information within global supply chains, even among people in different organisations. Some cloud-based solutions, such as powerful Software as a Service (SaaS) platforms, will deliver value that in-house solutions can’t match.
SaaS is a software distribution model in which a third-party provider hosts applications and makes them available to customers over the internet. SaaS is one of three main categories of cloud computing, alongside infrastructure as a service (IaaS) and platform as a service (PaaS). Firms may reduce IT support costs by outsourcing hardware and software maintenance and support to their SaaS provider. SaaS is closely related to the application service provider (ASP) and on demand computing software delivery models.
There may be some challenges with adoption of new disruptive cloud technologies including data security and finding employees with the requisite skills. Since it seems procurement professionals will be largely responsible for the roll out of cloud-based services, this shift will require procurement to seek out employees with new skills in managing the supply chain cloud.
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One solution is to seek out a strategic technology partner with focus on service that can act as a services procurement solution and a resource. A global supply chain can result in changing internal buying requirements. Cloud computing will allow procurement team members get information at the click of a mouse. When used correctly, cloud computing helps reduce risk of disruption and improves supplier relationships which is key component of corporate network.
Technology helps automate the procure-to-pay process to reduce time-consuming administrative tasks and enables procurement professionals do what they do best.
Changes to supply chains are a reflection of trends in the wider world, where we are becoming vertically-integrated and connected online, due to free, real-time information, rapid expansion of the mobile internet and affordable, unlimited cloud access.
At Flex – an American multinational technological manufacturer – a software-based, real-time mobile collaboration tool, called “Flex Pulse” has been created. This platform monitors all aspects of the company’s global supply chain, providing up-to-the-minute data analysis while aggregating and parsing global events that might impact supply chain efficiency.