Still not in the cloud? Then act now!

Cloud computing is nothing new, but its uptake has recently skyrocketed as companies from all sectors move their IT into the cloud. With the technology now established as a commodity, transport and logistics players can reap many benefits by adopting it. And businesses that are slow to act will find themselves at a serious competitive disadvantage. But cloud adoption also has its pitfalls. Here, we consider both sides of the coin and show how transport and logistics players can sidestep the hazards and harness the benefits of cloud technology.

Upside: business benefits of cloud solutions

By replacing monolithic legacy solutions with loosely-coupled cloud microservices, companies can reap cost savings while boosting agility and accelerating system release cycles. And when it comes to transport and logistics, cloud-based solutions promise major enhancements in key areas including scope management, time management, and supply chain communications.

Industry observers see a marked trend toward cloud-based solutions: International Data Corporation (IDC) anticipates that in just two years’ time some 80% of supply chain interactions will be via cloud-based networks. And big-name players like UPS are already launching cloud solutions to enable transport and logistics companies to leverage the associated advantages.

Bosch, for example, currently offers cloud-based services designed to help logistics providers improve efficiency and safety. These solutions not only enable predictive diagnostics for commercial vehicles, reducing maintenance and service costs; they also help cut fuel consumption by determining the most efficient driving strategy for particular stretches of road.

Downside: vast untapped potential

Given the benefits of the tech, it’s perhaps surprising that many businesses currently using the cloud are not reaping its full potential. In fact, as many as half of the transport and logistics companies I see in my day-to-day work are not even realizing 50% of the potential gains. So why is this potential going untapped?

Three key considerations for cloud strategies

No matter what industry you’re in, there are three key pitfalls associated with cloud solutions: security, architecture, and IT skills. To make the most of the cloud, you need effective approaches to sidestepping each of these.

Security: compliance in the cloud

Companies look to the cloud for the computing power to process today’s vast data volumes. But because this data includes sensitive personal information, transport and logistics companies must ensure their cloud solutions comply with stringent privacy and security requirements.

To master this challenge, you have to pinpoint the security requirements your cloud-based systems must meet – in terms of physical access, protection against hackers and system outages, and data access authorizations. And then you must design a solution that delivers protection on all fronts.

Architecture: radical rethink required

As mentioned, one great advantage of moving to cloud-based IT comes from replacing monolithic solutions with multiple microservices. So companies that simply relocate their established system architecture to the cloud will obviously miss out on the potential benefits.

To leverage the full potential of the cloud, you need to fundamentally rethink your architectural models, moving away from the traditional monolithic approach to the new microservices paradigm. This means replacing large self-contained legacy systems with simple modular microservices, each handling a clearly defined functional area.

IT skills: high demand/short supply

If you want to put the cloud to work for your business, you need staff with the right skills. But high demand for this expertise makes it difficult to recruit and retain cloud specialists. Worldwide, the resulting knowledge gap is estimated to be costing big businesses more than USD 250 million in lost potential annually.

Many IT decision-makers regard this as a pressing issue, impacting their companies’ revenue and ability to deploy cloud platforms. And a sizeable percentage believe additional investment in the workforce is needed to meet the development challenges of the cloud.

One approach to mastering the skills issue is to rethink your IT organization, creating a dedicated unit for cloud engineering. Another is to develop a cloud skills strategy based on current and future needs – and that will involve striking the right balance between generalists and specialists in your team, depending on the cloud skills your company requires. 

But where are the cost savings?

Companies moving to the cloud often find that the expected cost savings fail to materialize. Sometimes the switch may even bring unforeseen cost increases. The problem is that many businesses move to the cloud simply because “everyone’s doing it”. As a result, they fail to adequately consider which approaches are right for them or the potential pitfalls. This is why it’s essential to have a well-thought-out strategy tailored to your situation and requirements.

Non-adoption is not an option

As the cloud trend gathers momentum, companies need to consider their cloud strategy very carefully. Transport and logistics executives must look at where their organizations are today and where they want to be tomorrow. If they are already using cloud solutions, they have to examine the associated pitfalls. And if they are not, they have to get on board fast to avoid missing out on significant cost savings and agility gains. The cloud now offers a wide variety of options for transport and logistics companies – but non-adoption is not one of them.