Interactive session : technology : customer relationship management head to the cloud

What types of companies are most likely to adopt cloud based CRM software services? Why? What companies might not well suited for this type of software?

Types of companies which are most likely to adopt cloud-based ERP and CRM software services will be companies that want to cut IT staff cost. With CRM and ERP, a business can be up and running with the software quickly which less need for in-house IT staff or high levels of technical skills, and things like security and upgrades are looked after by the vendor. This is because the difference between cloud and on-premise is that cloud-computing makes your software an operational expense rather than a capital spend. There’s usually little or no financial outlay in terms of hardware and IT infrastructure, and you pay a monthly fee to use the product, which is based on the number of users you have. Some businesses prefer a capital spend and to ‘own’ the software. Others prefer an operational cost, as with the cloud. For cloud-based applications, you also need a reliable internet connection, and in some sectors there can be issues with the geography in which the data is actually held. Many mainstream business software vendors are working to transfer their traditional on-premise applications in to the cloud. From a technical point of view, it is not as straightforward as it may first appear. Once it has achieved, the results are arguably superior to applications that have been developed as purely cloud-based applications. 

Next, companies which might not be well-suited for this type of software are those companies from small to middle-sized companies. These companies have senior finance professionals and they concern about security and the lack of information and understanding about cloud technology which are the main reasons for organizations are staying away from cloud ERP. For the vast majority of businesses, modern commercial cloud applications provide exceptionally high levels of security, including data protection and back-up, and are usually more secure than the majority of on-premise applications

What are the advantages and disadvantages of using cloud based enterprise applications?

Advantages of Cloud Computing
Cloud computing offers numerous advantages both to end users and businesses of all sizes. The obvious huge advantage is that you no more have to support the infrastructure or have the knowledge necessary to develop and maintain the infrastructure, development environment or application, as were things up until recently. The burden has been lifted and someone else is taking care of all that. Business are now able to focus on their core business by outsourcing all the hassle of IT infrastructure.

Cost Efficiency

This is the biggest advantage of cloud computing, achieved by the elimination of the investment in stand-alone software or servers. By leveraging cloud’s capabilities, companies can save on licensing fees and at the same time eliminate overhead charges such as the cost of data storage, software updates, management etc.

The cloud is in general available at much cheaper rates than traditional approaches and can significantly lower the overall IT expenses. At the same time, convenient and scalable charging models have emerged (such as one-time-payment and pay-as-you-go), making the cloud even more attractive.

If you want to get more technical and analytical, cloud computing delivers a better cash flow by eliminating the capital expense (CAPEX) associated with developing and maintaining the server infrastructure.

Convenience and continuous availability

Public clouds offer services that are available wherever the end user might be located. This approach enables easy access to information and accommodates the needs of users in different time zones and geographic locations. As a side benefit, collaboration booms since it is now easier than ever to access, view and modify shared documents and files.

Moreover, service uptime is in most cases guaranteed, providing in that way continuous availability of resources. The various cloud vendors typically use multiple servers for maximum redundancy. In case of system failure, alternative instances are automatically spawned on other machines.

Backup and Recovery

The process of backing up and recovering data is simplified since those now reside on the cloud and not on a physical device. The various cloud providers offer reliable and flexible backup/recovery solutions. In some cases, the cloud itself is used solely as a backup repository of the data located in local computers.

Cloud is environmentally friendly

The cloud is in general more efficient than the typical IT infrastructure and It takes fewer resources to compute, thus saving energy. For example, when servers are not used, the infrastructure normally scales down, freeing up resources and consuming less power. At any moment, only the resources that are truly needed are consumed by the system.

Resiliency and Redundancy

A cloud deployment is usually built on a robust architecture thus providing resiliency and redundancy to its users. The cloud offers automatic failover between hardware platforms out of the box, while disaster recovery services are also often included.

Scalability and Performance

Scalability is a built-in feature for cloud deployments. Cloud instances are deployed automatically only when needed and as a result, you pay only for the applications and data storage you need. Hand in hand, also comes elasticity, since clouds can be scaled to meet your changing IT system demands.

Regarding performance, the systems utilize distributed architectures which offer excellent speed of computations. Again, it is the provider’s responsibility to ensure that your services run on cutting edge machinery. Instances can be added instantly for improved performance and customers have access to the total resources of the cloud’s core hardware via their dashboards.

Quick deployment and ease of integration

A cloud system can be up and running in a very short period, making quick deployment a key benefit. On the same aspect, the introduction of a new user in the system happens instantaneously, eliminating waiting periods.

Furthermore, software integration occurs automatically and organically in cloud installations. A business is allowed to choose the services and applications that best suit their preferences, while there is minimum effort in customizing and integrating those applications.

Increased Storage Capacity

The cloud can accommodate and store much more data compared to a personal computer and in a way offers almost unlimited storage capacity. It eliminates worries about running out of storage space and at the same time It spares businesses the need to upgrade their computer hardware, further reducing the overall IT cost.

Device Diversity and Location Independence

Cloud computing services can be accessed via a plethora of electronic devices that are able to have access to the internet. These devices include not only the traditional PCs, but also smartphones, tablets etc. With the cloud, the “Bring your own device” (BYOD) policy can be easily adopted, permitting employees to bring personally owned mobile devices to their workplace.

An end-user might decide not only which device to use, but also where to access the service from. There is no limitation of place and medium. We can access our applications and data anywhere in the world, making this method very attractive to people. Cloud computing is in that way especially appealing to international companies as it offers the flexibility for its employees to access company files wherever they are.

Smaller learning curve

Cloud applications usually entail smaller learning curves since people are quietly used to them. Users find it easier to adopt them and come up to speed much faster. Main examples of this are applications like GMail and Google Docs.

Disadvantages of Cloud Computing
As made clear from the above, cloud computing is a tool that offers enormous benefits to its adopters. However, being a tool, it also comes with its set of problems and inefficiencies. Let’s address the most significant ones.

Security and privacy in the Cloud

Security is the biggest concern when it comes to cloud computing. By leveraging a remote cloud based infrastructure, a company essentially gives away private data and information, things that might be sensitive and confidential. It is then up to the cloud service provider to manage, protect and retain them, thus the provider’s reliability is very critical. A company’s existence might be put in jeopardy, so all possible alternatives should be explored before a decision. On the same note, even end users might feel uncomfortable surrendering their data to a third party.

Similarly, privacy in the cloud is another huge issue. Companies and users have to trust their cloud service vendors that they will protect their data from unauthorized users. The various stories of data loss and password leakage in the media does not help to reassure some of the most concerned users.

Dependency and vendor lock-in

One of the major disadvantages of cloud computing is the implicit dependency on the provider. This is what the industry calls “vendor lock-in” since it is difficult, and sometimes impossible, to migrate from a provider once you have rolled with him. If a user wishes to switch to some other provider, then it can be really painful and cumbersome to transfer huge data from the old provider to the new one. This is another reason why you should carefully and thoroughly contemplate all options when picking a vendor.

Technical Difficulties and Downtime

Certainly the smaller business will enjoy not having to deal with the daily technical issues and will prefer handing those to an established IT company, however you should keep in mind that all systems might face dysfunctions from time to time. Outage and downtime is possible even to the best cloud service providers, as the past has shown.

Additionally, you should remember that the whole setup is dependent on internet access, thus any network or connectivity problems will render the setup useless. As a minor detail, also keep in mind that it might take several minutes for the cloud to detect a server fault and launch a new instance from an image snapshot.

Limited control and flexibility

Since the applications and services run on remote, third party virtual environments, companies and users have limited control over the function and execution of the hardware and software. Moreover, since remote software is being used, it usually lacks the features of an application running locally.

Increased Vulnerability

Related to the security and privacy mentioned before, note that cloud based solutions are exposed on the public internet and are thus a more vulnerable target for malicious users and hackers. Nothing on the Internet is completely secure and even the biggest players suffer from serious attacks and security breaches. Due to the interdependency of the system, If there is a compromise one one of the machines that data is stored, there might be a leakage of personal information to the world.

 What people, organization and technology issues should be addressed in deciding whether to use a conventional CRM system versus a cloud based version?

People

Risk assessment it is hard to assess the risk when the company does not own the infrastructure that support ERM and CRM system.

Dependability: companies using cloud based CRM and ERP solution might become dependent of their providers since they do not store the data and might not be able easily export. It to another system to require.

Organizational

Human resource optimization: while traditional ERP and CRM solutions demand for technical staff cloud based solution allow to optimize HR to focus on operation

Technology:

Security: using the web as infrastructure, cloud-based ERP and CRM solution have difficulties in offering security-comfort to companies that on sensible data

Available due to web-failure tolerant model, cloud based ERP and CRM solution suffer from availability issue that might cause business operation failures