It has taken a while for “Cloud Computing” initiatives to gain momentum on a broad industry basis, but the notion of cutting back on IT-related expenses is not wasted on small and middle-sized enterprise owners. IT costs have tended to grow faster than even healthcare expenses over the past decade, as the majority of businesses must operate and compete on the Internet or risk disappearing into the ether of “has been” companies. Early converts to this new approach to outsourcing have gained more flexibility and have significantly reduced their cost exposures for hardware, software, and specialized talent resources.
After you have realized a modicum of success with cloud computing tactics, what are the next hurdles that must be taken in stride? As with any new endeavor, there are always “kinks” to be worked out and a variety of new issues to confront. Cloud computing is no different.
Depending on your unique situation, you may have tackled issues related to software applications, infrastructure processes, or operating platform configurations, or all three in some cases, but your objectives going forward will relate somewhat to the following categories of effort:
- Management Aspects: Benefits from outsourcing are typically cost related, but many sometimes forget that one cost aspect increases – managing disparate service providers, which can mean the difference between success and failure. The “Cloud’ component of the software services industry has been growing leaps and bounds, constituting roughly 10% of total services, but growing at rates of 4 to 5 times the industry as a whole. The “Wild West” atmosphere has favored early providers, most assuredly in the biased nature of early contract provisions. Do not be shy in demanding effective service level commitments;
- Data Security Issues: With more service suppliers, both public and private, the security issues of privacy, encryption, compliance, and governance rise to new levels of sophistication in an arena that is still evolving. Encryption standards for merchant services are quite severe, for example. Rules and processes will necessarily be in a world of flux, but standards will emerge and provide a basis for comparison and competition. Secondly, competing on analytics is fast becoming the new science of winning, an approach that requires mountains of data and predictive modeling routines to reveal data-driven insights. Accessing data across separate operating platforms will present new challenges;
- Customer Expectations: Controlling a “hybrid” environment of suppliers poses its own brand of performance expectations from a customer perspective. Monitoring and measuring the customer experience will take on a new level of importance, but flexibility and innovation are in many ways enhanced with the “Cloud” approach. Investments can now be confined to making your proprietary customer interface more “user” friendly and within your direct sphere of control.
Cloud computing has definitely reduced IT-related expenses and optimized processes from customer acquisition to merchant services, but owners should also realize that some areas of cost have naturally broadened. Focus on these areas to reap more rewards in this brave new world.