Six Questions Every Supply Chain Executive Should Ask About Cloud Computing

However, supply chain executives need to consider six questions as they plan their organizations’ progress along the road to high performance.

Cloud computing is already being used successfully in a range of ways by companies in search of high performance. Indeed, as supply chains are increasingly powered by information technology, cloud computing can potentially enable the flexibility to respond to customers’ constantly-shifting demands.

However, while cloud computing could generate significant benefits for the supply chain, there are many challenges. In addition, the media hype around the subject can make it hard to assess cloud computing’s true potential.

Accenture believes that the possible benefits are significant, and that supply chain executives must make the effort to make a detailed assessment independent of their IT departments. To assist, Accenture has identified six questions executives should be asking in order to narrow their inquiries without succumbing to superficiality, and to begin identifying the real opportunities and risks of cloud computing.

The six questions Accenture believes that supply chain executives should ask are:

1. What is cloud computing and how does it work? Cloud computing allows companies to access IT-based services, including infrastructure, applications, platforms and business processes, via the Internet.
   
   
2. Is cloud more than just a technology or applications play? While it is certainly based on technology, cloud computing has the potential to transform the way in which companies buy and use IT services, including across the supply chain.
   
   
3. Is cloud a reality for all supply chain processes? In short, no, not all supply chain processes will be suitable for transfer to the cloud. In particular, complex and/or unique processes, and processes that require heavy integration with either a physical flow or another information system, are unlikely to benefit from the cloud.
   
   
4. What benefits can cloud bring to my supply chain? These benefits can be divided into financial and operational.
   
   
5. How will cloud computing change business models in the supply chain? Buyers of these services will benefit from better decision-making, IT governance, business process governance and financial governance. Suppliers will also undergo a significant shift in the way they operate.
   
   
6. What are the challenges—and how can they be managed? For service providers, the challenges include the need to scale rapidly, fierce competition and pricing. For consumers, the No. 1 challenge is data security, followed by the loss of skills and knowledge, supplier risk, the potential loss of customization, and the changes to the business model that might be required.

Cloud computing is too important to leave to technologists. Supply chain executives should take the first steps:

• Develop a strategy.
• Define the business case.
• Set the standards for success.
• Survey the market.
• Collaborate with key supply chain partners to make decisions.
• Approach cautiously and evaluate frequently.
  
  

Executives of companies that provide supply chain services should take the following steps:

• Evaluate the market need.
• Evaluate the competition.
• Crunch the numbers.
  
  

Accenture has decades of experience in helping companies use new technologies to drive high performance. Contact us to find out how we can help your company develop the right cloud strategy, whether you are a consumer or a supplier of supply chain services.

Thomas Schramm is an executive in the Accenture Management Consulting practice and leads the Supply Chain Management service line within Austria, Switzerland, and Germany. He was formerly the global lead for the Service Management practice.

Jonathan Wright is an executive in the Accenture Management Consulting practice, and leads the Supply Chain Management service line within Southeast Asia, Australia, and Korea. He was formerly the global lead for the Fulfillment practice.

Dirk Seng is an executive in the Accenture Supply Chain Management service line. He focuses on transportation management and order management and leads the Accenture Order Management offering in Austria, Germany and Switzerland.

Derek Jones leads the Research and Development department for the Supply Chain Management Service Line.