Why Supply Chain Leaders Are Moving to the Cloud

Good supply chain management (SCM) is essential to your operational efficiency, customer centricity, compliance, carbon footprint, and ultimately your overall success. If handled correctly, your supply chain should improve customer service—along with the reputation of your brand—and boost your bottom line. But, as with many areas of business, the rules of the game are changing.

What's changing? Well, everything. New regulations, increased buyer expectations, shorter product lifecycles, fluctuations in demand, new market entrants, poor visibility of globalized supply chains—all these things, and more, are testing the limits of the traditional on-premises supply chain model. The simple truth is that the way things used to be done, and the solutions that enabled it, are no longer up to the job.

Today, organizations need levels of flexibility, integration, and visibility beyond what on-premises systems were designed to deliver.

On-Premises Supply Chains Can’t Keep Up With Today’s Needs

The pace of change in business continues to accelerate—and shows no sign of slowing down. Customers expect more, products are introduced and updated more quickly than ever, and new companies enter the market daily. With so much to keep up with, a lack of agility and scalability can cost an organization dearly.

On-premises supply chain management can add unnecessary expense to innovation, and often lack the flexibility needed to respond appropriately and quickly to a changing business landscape. In fact, it's no exaggeration to say that supply chain rigidity may not just hinder growth, but can jeopardize an organization's survival altogether.

Many established organizations are finding that the demands of their supply chains are increasing as IT budgets are being reduced. Often, too much money is spent on maintenance and upgrades rather than driving innovation. And with on-premises solutions, upgrades and the ability to leverage emerging technologies can be time-consuming and expensive.

The situation isn't any easier for new businesses. The large upfront investments involved in building an effective supply chain can be daunting—or even out of reach.

Today's complex global supply chain also makes it more difficult to gain visibility into the many activities that make up your supply chain—visibility that's essential for managing risk, reducing costs, and ensuring profitability. Without complete, accurate, real-time visibility, almost every area of your business can be affected, from product design and production costs, to quality, compliance, and customer satisfaction.

What's needed is a new approach: a new way of driving innovation and differentiation, and a new way of delivering solutions that can be scaled up based on incremental value and business need.

The Modern, End-to-End Supply Chain

Due to the shortcomings of rigid legacy on-premises applications, supply chain innovators are moving toward building a modern, flexible, end-to-end supply chain that's more suited to the dynamic challenges of today's business environment. Ultimately, this means a move to the cloud. In fact, IDC's 2018 Supply Chain Survey found that 75% of companies felt that the cloud was critical to delivering supply chain excellence both today and into the future.

Cloud-based SCM provides a wealth of benefits, including low upfront investment, secure access, faster deployments, simplified integration, continuous upgrades, and effortless scalability.

The best cloud-based SCM solutions have the following six characteristics:

1. Agility: Modern end-to-end supply chains offer greater scalability and agility—with more IT flexibility to allow for easier expansion and contraction. The ability to respond to rapidly changing demands is essential for the modern business, and supply chain management in the cloud enables you to quickly and securely deploy new services and capabilities, and easily scale to meet demand.
2. Ease of Use: SCM in the cloud speeds deployments, and allows you to outsource management, maintenance, and upgrades. That means the time and resources spent keeping the lights on can instead be directed towards innovation. In addition, there are numerous efficiency benefits, including a simple and intuitive user experience, quick access to accurate and timely analytics, social collaboration tools, and much more—all of which can be accessed anywhere, at any time, and from virtually any device.
3. Completeness and Connectivity: One of the biggest challenges of on-premises SCM is the potential difficulty in integrating systems to ensure that information is consistent and easily accessible throughout the enterprise. Supply chain management in the cloud enables open, seamless integration with all manner of IT solutions (such as financial systems, mobile devices, RFID, and IoT devices) in order to enable the real-time collaboration and comprehensive visibility into a single version of the truth that has a tangible impact on efficiency and productivity.
4. Cost Efficiency: Cloud-based SCM can offer numerous financial advantages to both established and new organizations. Low upfront investments and subscription-based pricing are appealing to organizations because they negate the capital necessary for a large initial outlay, whereas more affordable upgrades and new capability rollouts make adapting to changes far less expensive than a huge IT overhaul. In addition, the cloud enables easy integration of emerging technologies that can provide insights to improve your business outcomes, as well as reduce costs and speed up processes through automation of repetitive tasks.
5. Security: Your supply chain data is critical, so when you put your data in the cloud, you need to be confident it will remain secure. For this to happen, your cloud solution must support best-in-class security features, such as encryption, virus scanning, and whitelist support, and your data center must offer embassy-grade physical and logical security.
6. Fast, Flexible, and Safe Deployment: A tremendous benefit of SCM in the cloud is that there's no need to transform your entire supply chain at once. By offering a flexible path to the cloud, where you select those elements that will deliver the greatest value, you can prioritize your migration and implement at the right pace for your organization.

Interested in learning more about how leaders are leveraging cloud to make a notable impact on supply chain performance?

Read the Oracle white paper “Why Supply Chain Leaders Are Moving to the Cloud: Six Top Reasons.”

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