A Definitive List of the Business Benefits of Cloud Computing – Part 2

Improves cash flow

The capital investment you put into an on-premise IT infrastructure is normally based on a long-range forecast of what your highest computing demands will be. But what if, as they often do, the estimates turn out to be too high? Then you’ll have to bear with the huge depreciation cost or monthly amortisation of a grossly underutilised asset for the next couple of years.

That’s why a cloud-based IT infrastructure is much better. With its on-demand, utility-based pricing model, cloud solutions provide companies with clearer financial visibility. You spend on something you’ve already fully utilised, not something you only hope to fully utilise in the future.

How exactly does cloud computing’s on-demand, utility-based pricing work? Well, it’s really very similar to the way you pay for electricity. Let me give you an example. In Amazon’s EC2 cloud offering, consumers are billed on what they call a per instance-hour basis.

Meaning, if some of your servers aren’t needed at night and only need to run 10 hours a day, then you can stop those server instances when the day is done. When you receive your bill, ?you’ll be charged the cost of only 10 hours per day x the number of days those servers were operational.

The advantages of OPEX-based IT spending gets even better when we start talking about businesses that experience sudden spikes or seasonal spikes in consumer demand as in the case of retail, marketing, logistics and others. If you’re running any of these businesses and the demand shoots up ?say during the Christmas season, you can readily scale up your servers, memory, storage, and other computing resources to the required capacity. Then when the season ends and demand goes back to normal, you can just as easily release those resources that are no longer needed.

demand and capacity - cloud infrastructure

Compare that with a traditional IT infrastructure wherein you’d have to predict the highest possible computing demand for the next Christmas season and then build an infrastructure that can satisfy it. During the high months, your infrastructure may come out fully utilised. But what about the rest of the year after that?

demand and capacity - traditional IT infrastructure

Since cloud services are delivered and consumed on-demand, you’ll have more cash on hand than if you had invested in an on-premise IT infrastructure. That means more money to finance other operating expenses or other endeavors like Business Intelligence and analytics, marketing projects, sales incentives, IT innovations, store or office expansions, and many others.

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Data Replication

Medical Data Form

These days, not many companies can continue to operate once their entire computer system goes down. All the information needed in daily operations are stored in databases while the interfaces that make use of them all come in the form of software applications.

Software applications can be rapidly reinstalled and configured for as long as the necessary programs are available. Data, however, cannot be reconstructed as quickly even with hard copies available. It is therefore necessary to store your data in a replicated setup so that when one section goes down, operations can proceed without interruption.

For instance, if a category 5 hurricane renders your main office useless, you can simply rent workstations elsewhere, connect to the Internet and continue with your usual transactions for as long as data is readily accessible.

So how do we ensure the accessibility and reliability of your data? Here’s what we’ll do:

  • Activate data replication on your database management system. If your DBMS does not support replication, we’ll migrate all your data to one that does.
  • If absolutely necessary, we can allow modernised systems to run parallel to your legacy systems and prepare both for full modernisation when you’re ready.
  • Implement fail-over technologies where applicable to provide for automatic switching to a backup data server or network from one that has just failed.

We can also assist you with the following:

Shared Services ? Are They A Good Idea

Things happen fast in business and we need to stay on top. It does not seem long ago that some enterprises were still hands-on traders or artisans with a few youngsters to help out. People like that did not do admin and their accounting was a matter of making sure there was enough money in the jar.

When Wal-Mart’s Sam Walton took over his first shop in 1945 things had moved on from there, although he did still deal directly with his customers. When he died his legacy was 380,000 jobs, and a business larger than most economies. So there?s plenty we can learn from how he grew his business.

One of Sam?s secrets was his capacity to centralise what needed gathering together, while empowering store managers to think independently when it came to local conditions. His regional warehouses had individual outlets clustered around them within one day?s drive each. This shared service eliminated 90% of safety stock and released capital for expansion.

Wal-Mart took sharing services a step further in February 2006, when it centralised accounts payable, accounts receivable, general accounting and human resources administration at Wal-Mart Stores and Sam?s Clubs in the U.S. and Puerto Rico. The objective was to bring costs down, while allowing local managers more time to focus on their business plans and other initiatives. As a further spin-off, Wal-Mart was able to integrate its data on a single SAP platform and eliminate significant roadblocks.

This is an excellent example of sharing services by creating own centres of excellence.? Of course, this is not the only business possibility. Other corporates have successfully completely outsourced their support activities, and Wal-Mart has no doubt had a variety of similar offers too. But, is the Wal-Mart picture entirely rosy, or is there a catch?

The Association of Chartered Certified Accountants has indicated that top talent may be the loser globally. This is because the Wal-Mart model removes many challenges through standardisation, and offers less scope for internal promotion as a result. Language and cultural differences may also have a long-term detrimental effect on the way the departments work well together.

Local outsourcing ? this is the business model where several firms engage a shared service provider independently- may hence prove to be a more malleable option for smaller companies. It often makes more sense to hunt down made-to-order services. Offerings such as the professional support we offer on this site.

How Bombardier Inc. scored a Bulls Eye

When travelling anywhere in the world on land, sea or air, chances are, you will travel courtesy of something made by aerospace and transportation company Bombardier based in Montreal, Canada. In 2009, it set itself the goal of carbon neutrality by 2020. In other words, it hoped to remove as much carbon dioxide from the atmosphere as it was putting in.

By 2012, Bombardier concluded it was not going to become carbon neutral by 2020 at its current rate of progress. It discounted purchasing carbon offsets because it believed it would serve its interests better by introducing new energy-saving products to market faster. That way, it would achieve its objectives vicariously through the decisions of its customers. But that was not all that forward-thinking Bombardier did. It also set itself the following inward-facing objectives:

  • Reduce carbon footprint through efficient use of energy and less emissions
  • Involve the Bombardier workforce to raise awareness of behaving responsibly
  • Implement sustainable initiatives to further reduce the company carbon footprint

Specific Examples

At its Wichita site, Bombardier (a) fitted a white roof and insulation reducing summer energy consumption by 40%, (b) added an energy recovery wheel to balance air circulation, and (c) introduced skylights with integrated controllers to lower energy consumption by lighting.

At Mirabel, it enhanced the flue-gas management system by adding a pressure differential damper.

At Belfast, Bombardier (a) optimised HVAC systems to reduce pressure on chilling and air-handling plants, (b) installed solar panels on the roof, and (c) obtained approval for a waste-to-energy plant that will convert 120,000 tonnes of non-recyclable waste material annually.

By the end of 2013, Bombardier had already beaten its immediate targets by:

  • Reducing energy consumption by 11% against 2009
  • Reducing greenhouse gas emission by 23% against 2009
  • Reducing water consumption by 6% against 2012

Future Plans

Bombardier will never stop striving to reach its goal of carbon neutrality by 2020. It has a number of other projects in the pipeline waiting for scarce resources to fund them. During 2014, it continued with energy efficient upgrades at its French, Hungarian, Polish, Swiss, and UK plants.

These include consumption monitoring systems, LEDs for workshop lighting, new heating systems, and outdoor energy-saving tower lighting. The monitoring is important because it helps Bombardier focus effort, and provides measured proof of progress.

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