Cloud computing is still in its infancy, but its acceptance and adoption is unquestionably on the rise, creating the next monumental shift in computing deployment models. With todays current economic climate, cloud computing has now become an even more attractive solution.
The cloud allows IT-related capabilities to be provided as a service over the Internet and encompasses the terms software as a service, service-oriented architecture and Web 2.0. If implemented correctly, companies can leverage cloud computing to extend their existing technology investments and have a positive impact on bottom-line results within a very short operating horizon. Cloud-based solutions offer low start-up costs and rapid deployment, delivering quantifiable results in weeks rather than months a significant advantage in todays business climate.
Financial struggles will remain on the horizon for the foreseeable future and affect companies of all sizes. Daily headlines report delays in further investment in hardware and software purchases due to unfavorable credit terms. Given the current economic turmoil, it is difficult for IT leaders to navigate the best path for short- and long-term success. Cloud computing provides a bright ray of light through the gloomy reports. Because cloud computing offers organizations a more cost-effective means of acquiring and utilizing IT solutions and services, many analyst firms and IT experts expect the cloud adoption trend to be amplified by the current financial crisis.
Integration Challenges in Todays Market
In today's economic environment, enterprises need to carefully examine the ROI of any cloud-based investment. Well-known monetary benefits include more attractive total cost of ownership, reduced implementation effort, easier IT infrastructure upgrades, no personnel investment and less up-front costs. However, IT executives know all too well that building and operating an integration infrastructure isnt easy or cheap. Enterprises that adopt SaaS business applications have additional challenges in integrating data stored in the cloud with applications behind the four walls.
Addressing the integration challenge does not get any easier in an economic downturn, with less manpower and more sophisticated technology infrastructures. Issues can run rampant with each application and business process connection due to legacy files, operations data and financial formats that can conflict between business units. Even worse, disparate data formats could halt order configurations, invoicing and payment processing between trading partners. Each issue complicates integration, making it costly and time-consuming to connect at a business process level.
Legacy systems, such as electronic data interchange and flat file transfers are insufficient. Low-level connections that only transfer batch files between applications and trading partners are giving way to smart networks that incorporate diverse integration functionality, including real-time or near-time communication. Trading partners, customers, and internal/external applications demand closer and smoother connections to streamline business transactions and accommodate unique business process requirements.
The ability to integrate beyond traditional data integration at a business process layer is a clear competitive advantage. Integration roadblocks leave sales revenue stuck in the pipeline. Companies need better control, clearer process visibility, data validation and tighter governance over all interactions.
Globalization further complicates matters for integration. Multinational departments and outsourcing create friction from disparate IT systems and business practices. Today, enterprises must interact seamlessly with many stakeholders, including customers, suppliers, trading partners, other internal business units, SaaS application vendors and much more. Dynamic connections are required to collaborate with each stakeholder.
The Opportunity in the Cloud
For SaaS and cloud computing to live up to their true potential, the cost, time and effort of integrating across the value chain must be reduced and more closely aligned with business value. This is best accomplished through a focus on integrating business processes and an on-demand delivery model. Many solution providers are quickly assembling a go-to-market approach for cloud-based computing, but they lack the experience and expertise to deliver a solution that is flexible, scalable and reliable. Unnecessary risks can be avoided by selecting companies that have years of experience in delivering a complete technology solution through a cloud-based business model.
For SaaS and cloud computing application vendors, integration requirements can be removed from the table as a customer objection. Partnering with an integration provider allows SaaS and cloud computing vendors to alleviate integration angst and remain focused on their core business offering. For IT departments, it delivers the greatest ROI possible without creating new application silos, redundant data stores or hard-wired connections.
Challenges in the Cloud
With all the advantages of adopting a cloud-based infrastructure, it is not without its own set of drawbacks. IT departments and end users have voiced concerns regarding accessibility of data in the cloud.
Even with the necessary bandwidth to extract data, the details are unclear as to how to integrate the information between disparate software systems. The issue of integration will only continue to grow as companies begin to feel more comfortable with shifting critical data to the public the cloud for internal use by other departments, especially as the use of cloud computing model continues to increase in popularity.
Another challenge in cloud computing is a perceived lack of control over infrastructure environment, up-time and maintenance schedules. Given that the economic value proposition of cloud computing is largely due to the shared infrastructure and cost scalability, this can be a double-edged sword. For those who deem the ultimate control of the infrastructure as a necessity, cloud-based solutions may not be the best alternative. That said, from a business and an IT perspective, expectations regarding system availability can often be managed via a robust service level agreement complemented by a vendors strong track record of success.
The reality is that SaaS, SOA and cloud computing delivery models are on the rise as many enterprises move away from costly and resource-intensive software implementations to more cost-effective, utility-based solutions. Each is becoming a valid delivery model for streamlining process integration where robust integration platforms and speed-to-market are paramount for long-term solutions.
Compared to internal software, the managed-service approach reduces upfront investment, provides world-class integration functionality, leverages integration best practices and provides full cost predictability. Additionally, the skillsets needed to understand and implement ever-changing technologies are often included as packaged solution. Self-service integration provides the client with the option to manage their desired level of day-to-day integration activities. This allows companies to control as much, or as little, of the integration solution, while having end-to-end visibility of information flow within their trading community.
Given the current economic environment, it is more important than ever for organizations to gain efficiency and drive costs out of core business processes while maximizing existing customer revenue and positioning the company to easily accommodate new customer requests. By focusing internal resources on core competencies and leveraging best-practice managed services where they can, companies can close the gap between strategy and execution by increasing revenue and realizing a competitive advantage.
To capture cost savings and leverage existing IT investments, consider helping your internal and external customers and suppliers overcome business process and application integration challenges with business integration an ideal area to employ a managed service solution to gain quick ROI, slash integration costs and scale the operation.
Register or login for access to this item and much more
All Information Management content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access