How the cloud is redefining distribution

The distribution industry has gone through a transformation, a greater emphasis on service delivery has compelled distributors, as well as manufacturers and retailers, to reassess and redefine their role and to adapt to the changes in the way technology is being implemented and used. The shift to the cloud has supported the changes required with the dynamics of the channels distributors need to use to interact with their customers, it has made mobility and responsiveness the central themes of the industry, whilst allowing distributors to control costs. This popularity of the cloud is only set to increase, with a Goldman Sachs study predicting spending on cloud computing infrastructure and platforms will grow at a 30% CAGR from 2013 through 2018 equated with 5% growth for the total IT enterprise.

The benefits to distributors of a cloud based business management solution

Reliability and consistency of service

By adopting a cloud-based approach, distributors negate “down time” due to IT issues. As customer is king, and service is a distributor’s key differentiator, it is imperative for a distributor to provide a consistent service.  Because cloud providers operate within strict SLAs, customers are ensured of a minimal disruption and secure systems that they might not be able to guarantee if they have invested in an on-premise server maintained by their own IT staff.

Investing in customer-facing staff

If your business systems operate on your own servers, then you most probably will have a requirement for an IT department to run and manage this infrastructure and direct any disaster recovery plans. With a managed services cloud based solution a dedicated off-site IT team is standing by to limit downtime from technical malfunctions. By streamlining your IT function and allowing it to manage the strategic relationship with technology providers (applications and cloud), you can re-direct any additional overhead either direct to the bottom line or invest in customer facing staff who can generate revenues for the business.

Real-time pricing and inventory

Rapidly understanding the cost associated with every element of your supply chain allows you to control your bottom line. Pricing within transportation and warehousing has been known to fluctuate based on several factors: fuel prices, market conditions, or demand. Real-time inventory management with the cloud allows you to maximise your ability to respond to these changes whilst retaining a buffer for emergencies.

Improved visibility and accessibility of your distribution system

Cloud-based services can connect all stakeholders simultaneously in the supply chain, providing a more collaborative approach.. Cloud geo-analytics allows distributors to monitor delivery networks, prioritise slow-moving shipments and considerably reduce the quantity of products lost in transit, from anywhere. With cloud based systems, everyone from drivers to service representatives can access necessary information on virtually any device, making it much easier to conduct business remotely. Logistics managers can observe processes in real-time from remote locations and respond with immediate resource deployment if required. Global SaaS software revenues are forecasted to reach $106B in 2016, increasing 21% over projected 2015 spending levels. This increase in SaaS spend highlights the importance of having an IT system that you can scale to provide the necessary resources to meet your changing needs. This scaleability in both number of users and bandwidth provides a real cost effective model for distributors with a seasonal supply and demand model.  Your cost centres can track your cash flow, maintaining a predictable margin.

Implementing a Cloud Solution

As a Tier 1 Microsoft Cloud Solution CSP Provider and distribution industry specialist, Prodware recognises how cloud deployment can help optimise margin control, , customer service and delivery times; while reducing overall costs by improving the agility of your operating model. Prodware’s cloud service gives our customers the choice of cloud deployment that suits their business, from public cloud (Microsoft Azure) through to hosted, private or hybrid options. Contact us to find out more about these options, download the Cloud Adjust brochure and download our whitepaper for more distribution industry insights.

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