For many years, supply chain integration solutions have required installation of software, computers, and highly-trained technical staff to manage the IT infrastructure that handles the day-to-day activities of electronics manufacturers, suppliers, and their customers.
The accepted approach has been to install software within the company’s firewalls, and for many years, that was the only option available. But a growing number of companies are providing supply chain applications that are installed outside the firewall and use high-speed Internet connections.
These software-as-a-service (SaaS) or cloud-based applications are finding increasing acceptance among supply chain participants looking to reduce costs and increase their ability to interact with more trading partners.
Attitudes to the cloud are changing as negative ideas are proven unfounded. At the top of the list of perceived problems with the cloud were reliability, security, access, and suitability to any particular task. But there was one other issue that trumped the negative speculation raised by the adoption of SaaS: lack of information.
The real problem was that those individuals most likely to be in a position to make decisions on choosing a non-locally-installed supply chain management program were simply uninformed about the nature and benefits of SaaS and cloud-based systems.
When companies developed their cloud-based applications, they discovered that although their sales prospects understood the applications, most of them had little knowledge, and plenty of skepticism, about how these mysterious applications could be competitive with the systems they had relied on for years.
But over the last two years or so, the process of educating prospects has become less of an issue for some organizations.
“We find it less necessary to explain the workings of SaaS, and are able to concentrate on the benefits of our product line,” says Jim Frome, executive vice president and chief strategy officer for SPS Commerce, a provider of EDI translation and trading partner enablement programs.
Frome believes this change has come about slowly but has accelerated recently. Discussions about off-premise applications now focus on the relative merits of different offerings, rather than on whether the technology is viable.
People are becoming more comfortable with the security of cloud-based systems. It was one thing to wonder how secure these systems would be, when considered independently. But now that cloud-based offerings are being compared with their locally-installed competitors, the reality of delivering truly secure and robust environments has taken on a different set of comparison standards.
Local software installations are dependent on the resources available inside the firewall. Smaller organizations, in particular, may not have the manpower and financial resources to deliver 24/7 monitoring and protection. However, because cloud-based offerings depend on delivering security as part of the service, in most instances their security efforts are better than what can be expected of in-house protection.
Martin Kerr of Bestborn Business Solutions believes that security has now become a selling point for cloud and SaaS offerings: “Many of the smaller companies could not pass SAS 70 certification based on being able to handle just their own data. So as the SaaS services improve, they may actually be offering customers what amounts to an upgrade in how secure their data is.”
Most cloud-based offerings are still young, relative to those software applications traditionally installed inside firewalls. But as supply chain software and services vendors continue to move toward the cloud, the full range of these systems' advantages will be tested and, hopefully, confirmed.