By Craig Sullivan, VP and General Manager, International, NetSuite

“Cloud computing” has been the hot topic in enterprise IT for a while. Any quick web news search will reveal thousands of news releases announcing the arrival of new cloud applications designed for businesses and consumers. In fact, a major Gartner CIO survey has cloud computing as the number two technology priority for CIOs.

Recently the conversation in the enterprise IT department has shifted for many from “should we be moving to the cloud?” to “what, when and how are we moving to the cloud,” as many of the key benefits of the cloud model — reduced costs and management overhead, flexibility and scalability and accessibility — become increasingly well understood and accepted.

However, those questions of “what, when and how” are vital in order to understand which of the myriad cloud computing options provide the best solution to the issues IT departments are facing in today’s cash-constrained world. Cloud computing in itself is not a panacea to cure everything in an ailing business but the results of carefully considered transition to the cloud can be extremely compelling.

In today's economic context, finding the efficiencies and competitive innovations possible through process enhancement is often a first priority (identified as such in the same Gartner study), and technology platform options should be assessed in the context of how they help businesses address shortcomings there. Do the bottlenecks in your business focus around operational silos? Does your accounts department see your fax machine as mission critical? Are manual approvals and signatures still required for things that could be handled online? Where are the next growth opportunities and can your systems meet those challenges?

It is in these discussions where IT, through engaging and understanding the needs of the various business functions, can most effectively formulate its cloud strategy.

Tactical vs strategic approach

Embracing the cloud too tactically can result in unnecessary investment. Consider the case of online publishing company, Yudu Media. An initial investment in Salesforce.com was ultimately written off when the management came to terms with the limitations of a service that only addressed one aspect of the company’s business operations — in this case sales and marketing. A few months after its initial transition, the company realized it needed to go further in eliminating operational islands and moved its core business over to a cloud application suite that addressed its business process challenges across its marketing, sales and accounting functions. For Yudu Media, the alternative would have created a “hairball” of disparate systems, loosely coupled to other cloud and on-premise IT systems which would have been impossible to integrate seamlessly and cost a fortune to maintain and upgrade later.

In many cases, it is already apparent that the issue is broader than a single department’s needs. Bury-St-Edmunds based DIY tools reseller Justoffbase is a business that previously held its inventory and customer data in spreadsheet form, processed orders through a terminal and tied the whole process together manually. For its management, tying together the disparate functions was vital and introducing automation key to scaling its business. Having separate applications in use by finance, customer service, inventory management teams and so on was the problem and moving to the cloud on an individual platform without marrying the processes together wouldn’t have been a helpful fit — even if it addressed some of the specific problems that function of the business suffered from.

All of this is not to say that moving a single department or functional need to the cloud is not a great move as a first step of a broader strategy; many companies do exactly that and get great results from being freed from the shackles of aging, inflexible systems. Rather that you should not expect this to solve all the other problems with your current IT systems — in fact, it may serve to expose them as the department that is now benefitting from the modern technology is hampered by the slow pace of the rest of the organization that hasn’t yet upgraded to the cloud.

One of the biggest benefits of many cloud business management platforms is the promise of an “open” application development network. Systems that offer Platform-as-a-Service capabilities help ‘future-proof’ any investment you make by ensuring that you can further easily configure or customize the deployment as your business evolves and your needs inevitably change. In addition, being cloud-based means these systems can be more easily integrated with your other business applications. You should be aware though that creating too much integration complexity in the cloud will likely expose you to the same challenges you had by deploying multiple disparate systems on your own — a hairball in the cloud is still a hairball.

Efficiency vs innovation

In tandem with evaluating the potential for the cloud to streamline operations, businesses looking at their cloud strategy should consider that new technology not only lets us do the same things more efficiently but more importantly allows for entirely new ways of doing and running the business. Where a company might previously have kept a lot of stock of products, it might be able to pass orders directly to its suppliers in real time, cutting out the cost of keeping stock whilst maintaining a good level of responsiveness to its customers. If your accounting, e-commerce, customer and finance systems are unified it’s easier to experiment with multiple sales channels — both online and offline — leveraging the same central warehouse and investment in stock.

A services-based business might provide the ability for consultants to submit time and expense sheets directly for approval in the system — improving the project tracking process and speeding up the billing cycle — or, indeed, publish project status updates and other collateral in a secure customer portal online, improving customer communications.

Any business might look at transforming their customer communications by monitoring and engaging with customers directly from their business management platform via the media that matters to them — from Twitter to Facebook and back.

In order to ensure that they remain and competitive and thrive, it’s vital that businesses evaluating these platforms don’t just look at replicating what they do now in the cloud — but look to embrace the opportunity to do things differently.

Asking the questions

Whilst we are committed advocates that cloud computing is the model on which enterprise IT should be based going forward, we also firmly believe that re-creating your current systems and processes in the cloud won't help address the fundamental issues you need to address as you face up to on-going macro-economic turbulence.

Instead, by looking at your core business and identifying the process issues that create difficulties for your employees and limit your business today, you will be better placed to develop an holistic cloud strategy. Asking the hard questions — how can you better ensure your employees can collaborate in the best interests of the customer and the business? How can you minimize data re-entry between departmental systems? How can you achieve a holistic, real-time view of business performance — locally and globally? Beyond process improvement, do the platforms you’re evaluating give any opportunity for evolving your fundamental business model?

Engaging with these questions and more is a fundamental part of your path to the cloud — by understanding the needs of the business and how your chosen cloud-based systems can help address them, you will ensure your business can compete and thrive in today’s business environment.