Getting Value From The Cloud

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Open any business publication and an IT or supply chain manager is likely to find an ad like the one from Microsoft Cloud claiming: “This Cloud opens doors of opportunity.”

The promise of the Cloud, according to Microsoft Cloud, is that it frees up cash by reducing “the need for infrastructure and management.” Costly licensing fees and implementation costs are replaced by subscriptions; gone is the expense associated with maintaining on-site servers and managing upgrades; and everyone is always working with the latest version of the applications.

But, when it comes to the reality of sourcing Cloud services for procurement professionals, is it really as simple as replacing existing applications with Cloud applications? What are the questions a supply chain organization should consider to get value from the Cloud? And, what are the steps that a supply chain manager can follow to better direct their Cloud sourcing dollars in order to gain superior value?

Those are some of the questions we sought to answer in a recently concluded CAPS-sponsored study on sourcing Cloud-based services. The purpose of the study was to develop clarity on what organizations can do to successfully source Cloud services. The topic emerges as one of the most pressing issues for CPOs and CIOs as their organizations prepare to invest millions of dollars in Cloud-based services. Gartner, for instance, recently predicted that the public Cloud services market is expected to be more than $200 billion in 2016. The present study was commissioned at the behest of CPOs who are members of CAPS. In particular, the study focused on understanding the challenges of Cloud sourcing efforts, detailing the risks and their mitigation strategies and offering a framework for streamlining Cloud sourcing efforts of the organization.

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