Zhou (Joe) Ye
Cloud computing is the top 1 hot word in IT industry in
recent years. And it inevitably involved in supply chain management topic. I
worked in SAP, the largest ERP software producer, for 5 years and cloud
computing had been a topic in the company’s top management team.
There’re several significant advantages of running ERP at
cloud rather than the current mode.
At the moment, ERP software is running as centralized system
on the servers. The maintenance of these servers is responsibility of the
manufacturer itself. Therefore each ERP user pays for its own maintenance.
However, it’s a different story in cloud computing. The servers are actually at
cloud side like Amazon, Google or Microsoft. The maintenance cost will significantly
drop due to economics of scale.
Additionally, the firm running ERP should maintain both the
software and hardware by itself, whereas it might not be good at that since it
could be a plastic bottle manufacturer. Therefore, consulting firm like
Accenture or IBM and support team of ERP software provider like SAP are hired
to help the client (plastic bottle manufacturer) implement, upgrade, and
maintain this huge system. Since the whole process (from the beginning
installation to daily maintenance) is outsourced, and it’s hard to estimate the
volume of work, the cost is not transparent to the real stakeholder – the plastic
bottle manufacturer. And in the real world, this cost is usually very high. In
the cloud computing world, the plastic bottle manufacturer need not worry about
transparency. The price of cloud computing is clearly marked based on the storage
size, the data flow size, and computing power needed, rather than private and man-day
based contract with consulting firms.
Besides the cost efficiency, a unified system format and
more integrated communication channel in cloud server will make the business
process between different business entities much easier and effective. Just as
mentioned in the article “Cloud computing: The answer to supply chain woes”, in
current ERP systems, partners across the supply chain often do not provide each
other with timely enough information, and process steps tend not to be joined
up as seamlessly as they might be[i].
However, just like adoption of ERP systems 20 years ago,
there’re also obstacles to run business on cloud. The top 1 problem is security
concern. Now every ERP servers are running at each company’s headquarters,
which means all the confidential data is physically within the company border.
While in cloud computing’s case, all the business data, confidential or not,
legal or not, will be in Amazon, Google or Microsoft’s hands. No matter how
cloud computing services claimed about privacy, this security concern about
data’s physical location is hard to overcome in the short future.
Another problem is when the whole economics is running on
the cloud, the reliability of cloud servers is very critical. Technical breakdown
or terrorist attack on these servers may bring the whole nation’s economy down.
To sum up, cloud computing is a very smart and effective
methodology in future’s business management. It is the trend in spite of the
obstacles in the way at the moment.
Thank you for sharing. For the client who wants more than a predictive training solution, but still prefers to implement predictive maintenance using their own personnel, choose maintenance consulting.
ReplyDeleteNice post i like the way you written the post.
ReplyDeletePost is easy to understand, all the points are very clear.
It looks like you spend a large amount of time and effort in writing the blog. I am appreciating your effort.
Eresource provides total plastic management solutions that addressed the production process including injection molding, extruders & compounder.ERP for plastic manufacturing industry has been design keeping its functioning in mind.
Thanks for sharing such a nice post...