Are cloud solutions the business model of the future?

Standardized processes, maximum efficiency and lower costs - the reasons for implementing cloud solutions in procurement are many and varied. However, many companies are still working with outdated or even analog processes. Patrick Sommer, Head of Consulting at CNT Management Consulting in Zurich, is aware of the current situation: "Many companies are still hesitant when it comes to digitalization topics. A lack of willingness to make decisions and a sense of purpose ensure that a lot of work is still being done with tried-and-tested business models." However, there is a willingness to change. Very often, there is a desire to revise the company's internal individual processes. The expert counters this with cloud solutions: "The cloud has the advantage of building on standardized processes that have all been developed on the basis of 'best practice'." Especially in times of the Corona pandemic, many companies have recognized the importance of digital solutions and are using free resources to implement IT projects. Since purchasing processes are not only necessary in all industries, but 90 percent of them are the same everywhere, cloud solutions are recommended for companies from all sectors.

From tried and tested to fully automated

Companies that have already digitized their business areas usually only need 12 weeks to switch from older "on-premise" to cloud solutions, but many customers find this too fast. Often, the implementation is then extended to just under six months, but the cloud then functions fully from day one. This means, for example, that time-consuming internal operating processes are controlled or automated centrally via a digital interface. From this point on, a fleet of machines can be managed on the move in a single program in which expenses and expenditures are always kept in view. And the purchasing process is completely paper-free. "By using the cloud, the entire procurement chain is digitized and automated, making error-prone and untraceable paper contracts a thing of the past," Sommer explains. That means everything from sourcing, supplier and contract management, purchase orders, to invoicing and payment processing runs completely digitally. Benefits: compliance with operational, contractual and legal regulations can be ensured more easily and employees make purchasing decisions based on the company's specifications. All procurement guidelines are automatically adhered to.

Early integration of suppliers

Despite the numerous advantages, many companies are still undecided about cloud solutions. The high flexibility and unrestricted control over the system is valued in proven "on-premise" solutions. Collaboration with suppliers also plays a role. "With cloud solutions, suppliers also have to play along, register in the program and specify their products there. It becomes difficult when the respective supplier itself has not yet arrived in the digital age," Sommer describes. That's why it's advisable to use communication tools such as newsletters, training courses and manuals to get suppliers on board at an early stage and integrate them into the process.

Cloud solutions: The right software is only the first step

Companies are often under the misapprehension that they have already mastered the digitization process by opting for on-premise or cloud solutions. While this is an important part of the transformation, it is far from the end: "In order to make the digital implementation successful, all company-specific measures and their scope must be included in the cost-benefit calculation," emphasizes Sommer. It is simply difficult to create roadmaps and KPIs for something of which you yourself have only limited knowledge, he says. "It is much easier to define individual measures if the optimization potential is correctly quantified," the expert emphasizes. Those who scrutinize their processes have already done a lot right.

More information: CNT Management Consulting