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The positive Pareto: IT costs and the Cloud

The positive Pareto: IT costs and the Cloud

Cloud-based technology enables logistics companies access to mission-critical solutions with lower IT costs and flexible deployment models. Are you benefitting yet?

In the logistics and supply chain space, we are all painfully aware of the ever increasing cost drivers in our businesses: spiralling oil and fuel costs, warehousing space, wages and salaries and the annual increase in our IT costs.

IT cost increases are driven by the salaries of our internal IT staff (especially where we have in-house developed and supported solutions) and by the index-linked increase applied by external vendors to our enterprise supply chain solutions every year.

Scary fact: up to 80% of our IT budgets is spent on maintaining what we have!

But “up” is not the only way for IT costs. Cloud-based solutions enable logistics companies to take control of IT-related costs and to benefit from a single, usage-based monthly fee. The monthly fee includes:

  • Access to mission-critical supply chain features and functions
  • Help-desk support
  • Product up-dates
  • Data centre costs

No nasty surprises! Any increase in monthly fees has a direct (and controllable) link to an increase in business volumes and system usage. And the opposite also applies: costs will come down as business volume peaks subside.

So far, so good, but it gets better. With considerable self-customisation capabilities, the user is empowered to take ownership of their supply chain solutions. The behaviour of much of the solutions can be changed by users, avoiding costly vendor professional services.

And better still, the new configuration can be trialled. If it works, keep the new settings. If not, restore the previous settings. Reducing the cost of innovation!

And finally, Cloud-based technologies embrace the inherent capabilities of the mother of all networks – the World Wide Web. But that’s a story for another day.

Reassuring fact to finish with: Cloud solutions mean that 75% + of your IT budget is spent on accessing the features and functions you need to meet your customer’s requirements – now and in the future.


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