Evaluating the Cloud: What is in the Cloud?

I expect many people have heard of the Chinese company Alibaba – which is actually a group of internet-based e-commerce businesses with sales greater than eBay and Amazon combined. Its September 2014 IPO, at $25 billion, was the largest in IPO history. With all the recent buzz about Alibaba, I just had to see it for myself and easily blew a half hour looking at offers to sell everything from 300 metric tons of fish heads to a small tractor.  (I’ll agree that looking at the fish heads was a waste of time, but doesn’t every guy need a tractor?). The point being is that from services to products the web has grown, matured and has much to offer us.

But, I digress. Today we’re looking at the ERP/FMS/HCM services that are available from Cloud providers, i.e., the back office applications. I’ll discuss front office applications in another blog[i]. The table below shows existing Cloud services (or pre-built applications) available for businesses.  I’ve classified these services at a high level for the purpose of this blog, but acknowledge that in practice there would be many processes under each major heading, such as Payroll, Benefits, Payables, Billing, Inventory, etc.

When an organization looks for a new application/service such as HCM, it’s wise to look at a group of applications from the same provider. Why? Because this leaves the integration and cross-functional reporting in the hands of the Cloud provider. I think this is a good idea. Over the years, I’ve found that building integrations and reports can be much more complicated than a client initially estimates. Additionally, when all applications come from the same provider, deployment is easier, training is easier, and end user adoption is greater, which ultimately results in a better overall solution.

Something else to consider when evaluating back office services in the Cloud is that typically you receive more than just the application functions. Cloud services often include real time dashboards, sophisticated analytics, document imaging support, system governance and “separation of duties” functionality. On premise solutions can include these extra features, but they’re often additional cost services and yet another task(s) for your IT group to staff and manage.

[i] Back office applications: http://www.techopedia.com/definition/1406/back-office-application

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My takeaway is that the Cloud is rapidly gaining both breadth and depth in providing organizations with a complete solution. Does this surprise you? There was a time when using Cloud apps meant that an organization had to run some applications on premise and integrate those with the Cloud or even integrate multiple Cloud solutions.  Those days are quickly becoming history as providers add both functions and new applications.

Join me next week as I explore the finer details of how Cloud applications are used.  Again, I promise to keep the blogs short, to the point and provide links to more information in any areas that are of particular interest to you. Just shoot me a note Cloud@Sierra-Cedar.com with your comments, questions (or disagreements).

[i] Back office applications: http://www.techopedia.com/definition/1406/back-office-application

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