Practical Approach To Business Transformation Using Cloud Technology SaaS Model For Small And Medium Enterprises
It is a forgone conclusion that every business large or small must invest in Information technology (IT) to transform itself and stay competitive or even survive. It's also no secret that Cloud technology is one of the most potent tools that contributes substantially to many such initiatives. This is especially a boon to SMEs those wish to undertake business transformation. SMEs though have inherent constraints to handle owing to their size.
Cloud's capability to provide ‘on-demand' services makes it so attractive from SME perspective
SMES In Comparison With The Large Businesses Typically:
•May not be able to invest upfront huge capex in an IT infrastructure
•May not be able to sustain long running technology projects
•May not have access to inhouse IT expertise(like CIO) to drive transformation
IT approach towards an SME transformation may need to be a bit different due to these constraints as compared to larger businesses.
Cloud comes in many flavors such as 'software-as-a-service(SAAS)', 'platform as a service (PAAS)', ‘infrastructure as a service (IAAS)' etc. All these are payable based on periodic subscriptions without any upfront investment. Also, it can be scaled up and down as needed.
This is an attempt to elaborate the deep impact Cloud SAAS Model (CSM) can create on an SME business with a practical approach while minimizing business risk. The article is directed towards CEOs and CFOs who manage such enterprises and not towards an IT professional.Cloud's capability to provide 'on-demand' services makes it so attractive from SME perspective. CSM enables SMEs to navigate most of the constraints mentioned above. Using CSM, an SME can now avail most of the software and infrastructure capabilities (those were hither to accessible only to large organizations)needed to lay the foundation of its business transformation. Let us see how.
This is an attempt to elaborate the deep impact Cloud SAAS Model(CSM) can create on an SME business with a practical approach while minimizing business risk. The article is directed towards CEOs and CFOs who manage such enterprises and not towards an IT professional.
Cloud's capability to provide ‘on-demand' services makes it so attractive from SME perspective. CSM enables SMEs to navigate most of the constraints mentioned above. Using CSM, an SME can now avail most of the software and infrastructure capabilities (those were hither to accessible only to large organizations) needed to lay the foundation of its business transformation. Let us see how.
Getting The IT Application Foundation Right:
Step-1: Deploy 'core business transaction software' using CSM software in ‘As-Is'mode
As a first step, every business must deploy core business software covering important transactions as only then other transformations can take place. These include ERP, Order to cash (CRM), Procure to pay(SRM), process automation and data management systems at a minimum. It's equally important to deploy these rapidly ideally within weeks and channelize business through them.
It's a great news for SMEs that most of the top end ERP, CRM and SRM systems are today available as SAAS model. These are in 'ready-to-use' mode covering most of the core functionalities needed by the business. There is no upfront investment needed in any hardware or software. SAAS model is payable as a periodic subscription without any huge upfront capex. It is therefore possible to start small with few licenses subscription and then expand based on a smart business roll out strategy. This relieves the SME of stresses on cash flow. This is without doubt an important business advantage for any SME.
It is strongly recommended to rapidly implement such as software in 'as is' mode. It is very important to control the ‘software customizations' to zero or to a very minimal extent. The common pitfall of trying to change readily available properly working software as per user demands must be avoided. The implementation time and effort need to be mostly invested in right data generation and user trainings. An SME can go live with such a software within weeks if such an approach is deployed. It can be said that 80% of the business now gets driven through software with 20% of effort. The success of this approach depends on strong top down Change Management.
Step-2: Expand the reach of ‘core business transaction software' to cover all business through smart roll out strategy
It is important now to cover entire business through these business applications. If initial implementation covered only critical units, now is the time to cover all the remaining units and important processes. Additional subscriptions may be purchased, if necessary, for additional users. An example of necessary coverage to be achieved: ERP system covers every transaction that impacts company's books without exception.
Step-3: Setup 'continuous improvement'track for each software Once core business transactions start running on SAAS core applications, it is now time to set up continuous improvement track. The gaps between what the business needs and software delivers can be merged by business process changes or else by software development. Also, decision support MIS can be generated now that trustworthy structured data is available. A powerful governance mechanism needs to be in place to ensure only critical improvements are considered and are periodically reviewed. These are usually controlled through ‘Change Advisory Board' mechanism where senior management may approve relevant changes to be executed.
The approach mentioned above is essentially no different from renting a readily available car and using the same for travel immediately, instead of trying to design and build a car for yourself. This approach clearly prioritizes achieving business goals quickly through smart use of available technology.
If executed properly, CSM technology will allow an SME to deploy critical business transaction systems successfully and fast with minimal upfront investment. This will be the foundation to any subsequent business transformation initiative.