The cloud isn’t just for websites any more. Cloud computing can transform the entire operations of wholesale businesses.
www.andertoons.com
It may not be a paradigm shift, but certainly a significant one for all IT departments. Technology has changed the way business is done in so many ways. Machines, robots, computers, cell phones, internet and now the cloud.
What is cloud computing?
Cloud computing is the ability to use software in the web. A simple example is email. Microsoft Outlook is not in the cloud. It is a desktop (or server) based application that you must install and use on your computer. Gmail is in the cloud. You don’t install it on your computer. It is accessed via the internet with a web browser. For more explanation, see this article on howstuffworks.com.
Technology Impact Cycle
When important technology is introduced to the market, things change significantly. It happened with computers, mobile phones and the internet. We have lived through these technological shifts and saw first hand how it changed business and wholesaling. This graphic summarizes the general pattern of what happens.
(click to enlarge)
Below is an example of the Technology Impact Cycle applied to the introduction of computers to wholesalers.
| Stage | Computers’ Impact on Wholesale |
|---|---|
| New Technology Introduced | It was not clear how much computers could help wholesalers, but there was certainly opportunities in the coming changes. Computers made old technology like bookkeeping ledger books obsolete. |
| Early Adoption | Wholesalers who bought early paid hefty prices. Further, they were buying technology that was still maturing and finding their functions in the operations. But there was value also. They could provide computer printed invoices to their customers, and they could do their accounting faster and more accurate. These benefits helped them stand out amongst their competitors. |
| Growth | As computer technology matured, prices went down. They became more reliable, faster and with more features. More companies started making them. |
| Late Adoption | Wholesalers late to adopt bought cheaper and better computers. But until then, operationally, they were lagging behind their competition, still issuing hand-written invoices and using doing manual accounting. |
| Maximize Value | As computer technology became (and still is becoming) more mature, they have transformed every area of wholesale. Computers are now in the warehouse for receiving shipments, and at tradeshows to input orders. |
Growth of Cloud Computing
In the last few years cloud computing has really taken off. Accelerating the growth and adoption of cloud computing has been mobile technology. Even the US government has already adopted a cloud computing strategy. Prices are going down for cloud services, many non-cloud companies have jumped into cloud technology like Dell, HP, and Microsoft.
Adoption is becoming widespread for both small and large companies. For small businesses, they don’t need to buy expensive hardware and they don’t want to allocate resources to support it. For large companies, the same concept applies.
Impact on Wholesale
We are definitely in the Growth stage of the Technology Impact Cycle. Cloud technology is again transforming the way wholesalers operate.
Here is a quick example I see with wholesalers. The wholesaler has a website that stores customer data, inventory data, and processes orders. The “live” product data is stored in their in-house system. Each day, the wholesaler must update their website to reflect the changes in customer and inventory data which is changing constantly.
A Cloud Solution
Instead of holding the customer and inventory data in-house, move it into the website. It is already processing orders so why not use it as the order system.
In this simplistic example, the point is to show how cloud computing can fit in to improve wholesale operations. There are numerous other examples of this, including leveraging cloud-based systems to create mobile apps for sales reps and trade shows.
A New Operational Beginning
Just as computers caused wholesalers to re-create their operations for the better, cloud technology is doing the same. The data, that moved from paper to computers, can move into the cloud. The operations would adjust accordingly, and the business would be better.
Benefits and Drawbacks of Cloud Computing
Here is a brief list of pros and cons of cloud computing.
Benefits
- Use with any operating system, including mobile
- Access from any location with internet connection
- Highly scalable
- Less hardware (and management) needed
- Less energy consumed
- No software maintenance/upgrade management
- No or less data backup management
- No data/software security management
- No inter-software compatibility issues
Drawbacks
- Need an internet connection
- Entrust security management to cloud vendor
- Entrust backup management to cloud vendor
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