Supply chain management executives are tasked with many decisions every day, stemming from operational snafus, unplanned changes in supply or demand, or tactical decisions related to deployment of materials and resources.  This includes the ongoing participation and decision-making involved in the company’s sales and operations planning (S&OP) process.  In the past, decisions related to supply chain software needs and associated IT platforms were often deferred to an IT support team or peer IT executive.  That situation is quickly changing.

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With the advent of cloud computing, a supply chain executive must now be able to independently assess the need for process enhancement, appropriate software application and IT platform.  The primary reason is that cloud computing options present opportunities to provide more advanced technology while allocating the cost as a recurring operational expense, sometimes under the functional budget.  Like it or not, this implies that today’s supply chain executives need to understand the differences implied with a cloud offering, and specifically the differences implied in information security or multi-tenancy.

Let me share just one example.  With many of the newer S&OP management and support or control tower like applications, vendors offer a cloud computing platform deployment option.  As one example, SAP’s pending S&OP powered by HANA application will initially only be a hosted, cloud-based offering.  When considering any deemed mission-critical application, one in which highly sensitive data resides such as an S&OP process, functional evaluation teams will need to determine how such data is stored in the cloud, what security measures are being taken to protect that data, and how the software vendor will assure protection of that data.  In this realm, executives will experience terms like public and private clouds, single and multi-tenant, peak-load capacity, etc.

We would like to offer one resource to help in your understanding.  Over on Hewlett Packard sponsored Cloud Source Blog, bloggers Christian Verstraete and Laura Mackey have provided an ongoing series of commentaries directed at helping non-IT teams understand the meaning and tradeoffs of these new cloud computing options.  In their posting, The business aspects of Cloud: Part 5 – Do you need multi-tenancy?  the authors do a great job of explaining the intricacies of these options.   We recommend our readers absorb this series along with other educational commentaries found on the web.

The option of cloud computing can provide a viable alternative for more timely implementation of select advanced supply chain focused technology with a more attractive overall cost.  Functional executives must, however, enhance their knowledge and understanding of the inherent architectural tenets involved in cloud and other platform offerings.

Cloud is a good option when you understand how to appropriately evaluate the options.

Bob Ferrari

©2012 The Ferrari Consulting and Research Group LLC and the Supply Chain Matters blog, all rights reserved.