People wrongly believe the cloud is new, it’s not. Departmental systems like CRM and HCM have been in the cloud for some time now.
What is new, however, is that organisations are increasingly taking the next step and moving mission critical systems into the cloud, such as ERP and financials.
To learn more, The Manufacturer recently sat down with Andrew Kinder, VP Industry & Solution Strategy at global enterprise software provider, Infor.
How have you seen UK attitudes towards cloud evolve, and what does the future hold?
Andrew Kinder: If you look at cloud adoption among our customers around the world, the UK is now the second largest market behind the US. There’s still a huge way to go, but the rate of adoption is firmly in the positive territory.
I think the pace of the adoption surprised quite a lot of people, myself included, because we anticipated that the largest group of adopters would be small and medium-businesses (SMB).
If you’re a start-up or small business, IT can be very expensive. It requires people, servers, and technologies, and then experts to knit all those things together. Having a business application in the cloud where you don’t need to have any of that, you just press a button and you’re up and running with your own data, is therefore very appealing.
However, what surprised us was the strength of adoption among larger companies. We have several customers who have moved their very large, multi-billion-dollar businesses on to the cloud; but their business reasons for doing so are very different.
The pricing agility offered by the cloud, i.e. paying for only the features you use, is obviously attractive to companies of any size, but rather than being focused just on the cost savings, larger companies want different things. Specifically, they want ‘out of the IT business’.
By that, I mean they want to focus on running their business, they want their IT teams focused on what they consider ‘real’ business benefit not just keeping the lights on, upgrading applications and applying patches.
If you ask any CIO or CTO what their biggest headache is, they will say, ‘upgrades’. Upgrades are disruptive, they take a lot of time and as far as many businesses are concerned, they don’t add great value, unless you take advantage of new functionality. Therefore, moving to the cloud with a multi-tenant, single version of the software means you don’t ever have to worry about upgrades again.
Cloud makes the computing power, elasticity and capabilities needed to run sophisticated global businesses affordable to SMBs. In that sense, cloud truly has democratised IT.
Infor is a major advocate of using cloud technology to supercharge business activities. How does that work in practice?
Let’s take just one example, the Internet of Things. Everyone is talking about IoT, but where is all that data going to be held?
I was talking to a customer recently who operates in the farming industry and they noted that measuring the water intake of chickens would provide a good indication of how long a bird would take to reach maturity. They use this to predict supply at maturity for meeting daily demand from the market.
At the moment, businesses are collecting a lot of data, but they aren’t really making use of it. That’s not an issue because the cloud allows you to store information very inexpensively and build up a databank which can be mined at some point in the future thanks to artificial intelligence.
My advice would be to start collecting data now from a variety of sources. Don’t worry about whether it’s structured or unstructured, it doesn’t really matter, just store it because the algorithms will figure out whether it’s relevant or not.
How to claim your spot in the fast lane with Cloud Technology
Increasingly, cloud technology is being seen as an essential tool for turning change from a threat into an opportunity.
Imagine being able to:
- Open new offices and acquire new companies without having to worry about buying servers or managing a myriad of technology platforms.
- Expand and contract system capacity seamlessly to accommodate seasonal or cyclical variations.
- Reduce the burden on IT and allow those valuable resources to focus on more strategic activities.
- Enable employees to work the way they live—on their mobile devices and on-the-go.
Infor’s cloud partner is Amazon Web Services who specialise in ‘stateless computing’, in other words, you only use the computing power when it’s absolutely needed. Without stateless computing, you’re only option is to buy the most advanced computer in the world at great expense cost, but you only need to use it for a few seconds a day or minutes a year.
You probably couldn’t justify the cost, so you’d never invest and therefore miss the opportunity. Cloud gives you that opportunity by running sophisticated algorithms and artificial intelligence to garner insights, but only when you need it and you only pay for those particular moments in time.
Those are all technology-focused; but cloud also augments an organisation’s human capabilities, particularly around innovation which relies on collaboration and sharing ideas.
Absolutely. Cloud is connecting people, things and businesses together. Ten years ago, when there were no ‘things’, that equation was just people and businesses, and everyone focused their attention on business process re-engineering.
The introduction of intelligent things into the equation exponentially increases the value proposition because it allows you to collaborate globally, to gain detailed insights into how customers are using your products, the environments in which your products are being used, how your products are performing, the list goes on.
Technologies such as Artificial Intelligence(AI) are really starting to bring productivity gains to employees by automating routine tasks and providing new insights for better and faster decision making – especially out in the field where employees may be working remotely.
How does cloud help support manufacturers’ need to become more agile and responsive?
First, let’s talk about motivation. It’s not just the ability to do it, manufacturers simply must do it. Every company we talk to increasingly realises the importance of servitization; in fact, I don’t think we run a customer workshop which doesn’t include a customer saying they want to ‘transition from a products-based company to a service-based company’ – and they’ll express it in those exact terms.
So, how is cloud helping to support that evolution and forge stronger connections between manufacturers and their customers? Let’s use Nutreco – a global leader in animal feed and healthcare services – as an example.
Nutreco supplies feed distributors, so historically it’s had no direct contact or relationship with farmers. The key to overcoming that lay in identifying what the farmers primary goal is – bringing animals to full maturity as fast and as healthily as possible.
Creating a business model focused on providing knowledge services on animal health and nutrition represented a viable opportunity for Nutreco to add value to end-customers, forge those relationships and achieve differentiation.
Nutreco partnered with Infor to develop a cloud-based solution to consolidate, contextualise and communicate key information regarding animal weight and condition.
By optimising the feed mix to account for missing nutrients, Nutreco helps improve animal health and yield, enabling farmers to improve their profitability and, ultimately, increasing its own market share.
The solution will allow farmers to engage, query and specify requirements on any aspect of feed or animal health – creating a further differentiating service and value stream for Nutreco.
The Manufacturer also spoke to Andrew about the common inhibitors he sees regarding businesses embracing digital and asked him to outline some of the impressive gains he’s seen industrial digital adopters achieve.