As manufacturers face increasing pressure to optimize their operations, even the most reluctant organizations are left with little choice but to embrace digital transformation. One of the options open to manufacturers looking to modernize their IT setup is cloud computing.
The cloud refers to a network of servers used for data storage, management and processing. These networks, accessible via the internet, can be hosted in-house for use by one company (private cloud) or by a third party that provides services for several companies (public cloud).
Cloud-based systems are faster to roll out than traditional systems, enabling manufacturers to keep up with new developments. They are also easier to customize and scale. Organizations can outsource just about every aspect of their IT setup to cloud computing companies, from renting servers and virtual machines in datacenters to having software vendors take care of all hosting, maintenance and update tasks.
The convenience alone sounds enticing enough, but this is far from the only benefit the cloud has to offer. It can also help manufacturing companies struggling with an outdated IT infrastructure and make their businesses, generally, more agile.
This agility comes from giving manufactures access to more powerful resources. Thanks to the cloud, manufacturers no longer need to limit themselves to tech they can host and manage in-house. They can take advantage of the cloud’s raw processing power to bring within reach technology that they would never have had access to otherwise.
Take security, for example. According to The Cloud for Manufacturing report by Microsoft and Invensys, manufacturers that use cloud-based systems do not need to grant suppliers direct access to their internal network. By moving the security context toward a controlled external security perimeter, you can safeguard your internal systems while simultaneously improving your collaboration with suppliers.
The cloud can also save manufacturers money. Setting up and maintaining an excellent IT infrastructure requires a lot of resources, from powerful servers and numerous licenses to skilled staff to keep everything running smoothly — and those certainly aren’t cheap. Luckily, the cloud makes them more affordable.
Research conducted by IDC indicates that mature cloud adopters achieve millions of dollars in benefits.
Surveyed organizations realized an average of $3 million in additional revenue per cloud-based application. This can be attributed to the ability to acquire new customers, improved time to market, and risk mitigation.
These companies also achieved another $1 million in cost reductions thanks to cloud computing benefits like improved IT organizational agility, and business process improvements. In fact, according to The Cloud for Manufacturing, cloud-based manufacturing solutions can reduce up to 54 percent of the costs relating to IT infrastructure, maintenance and lifecycle for both new and existing operational or process improvement projects.
Finally, a third benefit for cloud in the manufacturing environment is the ability for manufacturers to provide new and enhanced services to their customers, such as online ordering and better security. For example, manufacturers can significantly enhance security by putting data in the cloud because it is so much easier to deploy and update than traditional IT systems. They can have a better view of the activity on their network, enhance data encryption and apply firewalls at both the network and application levels. Manufacturers who regularly deal with sensitive data, such as engineering specifications, and have limited IT resources stand to benefit the most.
Michiel Schipperus is CEO of Sana Commerce.