Today, cloud computing has become a basic resource for organizations of all kinds. A report from Technology Business Research found the global Software-as-a-Service market will reach $67 billion in 2018, up from $49 billion in 2015 - a compound annual growth rate of more than 8 percent. And small to medium-sized firms are often the biggest beneficiaries of the cloud, as the technology offers enterprise-level capabilities with little upfront expense, all while delivering superior flexibility, scope, cost-efficiency and computing performance.
Given all of that, it's easy to see why SMBs have been so eager to embrace the cloud. However, there's a potential complication here: the risk of a loosely planned approach to cloud applications. In many cases, SMBs inadvertently embrace an impulsive attitude toward cloud adoption to meet an immediate need, and that can lead to inefficiencies, shortcomings and missed opportunities.
The question which every SMB leader must ask himself is: Are we deploying the cloud effectively?
II. Cloud Complications
One of the key points that SMB decision-makers need to recognize as they develop their own cloud adoption strategies is that the problem is not the number of cloud applications they deploy, but rather whether they chose the right apps or not. More specifically, will the selected applications work together as part of a bigger picture?
In many cases, the answer is no.
According to Osterman Research, the typical SMB uses approximately 14 cloud-based applications, and that the average user utilizes 5.5 of these apps. These numbers are likely to grow further in the coming years. These are fairly sizable figures, but they become incredibly problematic when they do not relate to one another in a coherent fashion - which is precisely what occurs for many SMBs. After all, while most enterprises have formal procurement processes in place, this is not the case for the majority of SMBs. There are often no official guidelines to steer cloud application procurement, leading to haphazard efforts.
This lack of a formal cloud app selection and deployment process will frequently lead to one of two de facto approaches. First, the SMB's users in need of a new app may quickly evaluate the available options and simply choose the easiest, most convenient offering. Alternatively, users may spend far too much time trying to navigate the overwhelming number of options on the market.
In both cases, the end result is the same: SMB users will frequently choose cloud applications which are less than ideal for their specific needs and, just as importantly, do not fit into a broader strategy.
There can be serious consequences when SMBs approach cloud app implementation without a big-picture view. Three issues in particular stand out:
-Lack of integration:The apps chosen may not be able to integrate with existing IT infrastructure, which limits the potential to take full advantage of each app's features and capabilities.
-Lack of visibility:For business leaders to make the best possible decisions at every moment, they need maximum data and insight into their organizations. If cloud apps are deployed without a broader strategy, the lack of integration and coherence will make it difficult for leaders to visualize, and therefore understand, the available data.
-Underutilization of the cloud:Cloud computing covers a tremendously wide range of applications, each with their own advantages and disadvantages. A disorganized approach to app deployments will all but ensure that SMBs miss out on valuable cloud computing capabilities and features.
Leap the Pond recently worked with one company that had subscriptions to more than 80 distinct cloud-based applications. How does this happen? The cloud makes it very easy for a person or department to subscribe with a credit card. Before you know it, everyone is using his/her own app.
III. Cloud Solutions
Given all of the problems and complications that SMBs may encounter as a result of their cloud application deployment efforts, the obvious question is, how can SMBs gain the most value from their cloud investments?
The answer: SMBs need a more structured approach to the cloud. Every SMB that uses the cloud - which is to say, virtually all of them - needs to establish an organized, company-wide strategy that governs cloud deployments in every area. Only with a formalized process or principles in place can a firm hope to avoid the impulsive, disorganized approach to cloud adoption that is currently the standard at the majority of SMBs.
Put simply, the goal should be to develop a process that helps to ensure that every employee chooses cloud apps that not only serve that individual's specific needs, but which also fit into the company's broader goals and cloud strategy.
The specifics of this approach will vary from one SMB to another. However, there are a number of basics that should guide the development of most SMBs' acquisition processes for the cloud. Most importantly, there are four core functional areas which should serve as the foundation for the cloud application strategy:
-Operations (e.g. project tracking for a services business or MRP for a manufacturing business
-Customer relationships and services
These four categories represent the basic building blocks of an effective cloud strategy. Just about every cloud app that an SMB uses should fit into one of these areas, and they represent the most important aspects of business infrastructure. Consequently, an SMB cloud application deployment strategy should center on these four pillars.
In practice, this means that any SMB user looking to embrace a new cloud application must first consider how this ties into the company's strategy in regard to sales, operations, finance, or customer relationship cloud services. There will already be IT services in place in all of these areas, and quite possibly there will be cloud applications that have already been deployed. Any new cloud application needs to fit into this existing landscape, as well as the SMB's goals for the future.
IV. An Effective Framework
With that in mind, consider the following 10-step framework for choosing the right cloud application. While, as mentioned above, the ideal approach to cloud application selection will be company-specific, this basic guideline provides a solid starting point for individual SMBs to customize to suit their unique needs.
1.Document current issues:For starters, the user should speak with the relevant departments and team members to better understand the obstacles they face and what process improvements they hope to achieve with a new cloud app.
2.Prepare a top-down strategy:Look at the business as a whole and make sure that the new application(s) will fit into this overarching landscape. Top-down means the company's broader strategy and existing IT needs to come first.
3.Create a checklist:Identify all the features and capabilities you're looking for in the new cloud app.
4.Consider all the data needs:The new cloud application should deliver easy access to information. Integration with other systems will be key here.
5.Document expected improvements ROI:This step helps to ensure that the new cloud application offers tangible value, and will enable evaluation of its performance at a later date.
6.Whittle down to a shortlist:Pare down the possible cloud applications to a more manageable number.
7.Dig deeper on your own:Research via webinars, online demos, social media, review aggregators and more. This step further combats the tendency toward impulsivity.
8.See how it works for you:Can you customize the app? Does it integrate effectively with key applications and databases? Ultimately, make sure the app is good for your SMB specifically.
9.Get the numbers:Compare the total cost of ownership for the various options. Weigh the expenses versus the benefits, again keeping your business's unique goals, requirements and systems in mind.
10.Select:It's time to make a choice.
The company mentioned previously with more than 80 applications realized that many of its requirements could be met by rationalizing down to two core solutions – a financial application that also handled its project billing requirements and a CRM solution that supported sales pipeline management and tracked all customer service requests. While this company still uses other applications to manage other aspects of its business, by streamlining things, it’s saving from more efficient processes and benefitting from real-time access to performance and financial metrics.
The benefits of the cloud are well-documented and, therefore, the cloud is here to stay, and that's a good thing for small to mid-sized businesses in every industry. Cloud solutions allow firms to enjoy a huge range of capabilities that would be simply out of their price range if they had to rely solely on on-premise IT. What's more, the cloud outsources the responsibility for managing the applications to the third-party solution provider, which means that SMBs do not need to have personnel on staff with extensive cloud computing experience in order to take advantage of these resources.
To make sure that cloud applications deliver the intended benefits for SMBs, these firms need to reconsider how they approach the technology. A haphazard approach can only get you so far - to reach maximum value, SMBs need to develop an official strategy and process for identify needs, evaluating options and making the right selection.
Ultimately, cloud applications need to serve not just an immediate need, but rather the business as a whole. By keeping the big picture in mind at all times, SMBs will be perfectly positioned to master the cloud.