Operations: Cloud computing

Many businesses are confused by the diverse offerings of cloud computing. However, for next generation EDI, the ‘managed cloud’ is a simple notion, as Steve Rees explains.


Cloud computing is a remarkable phenomenon, with analysts at IDC predicting public cloud computing services to be a $73 billion market by 2015. However, many CIOs are still puzzled by the term and may not yet be familiar with how appropriate ‘the cloud’ is for certain business IT functions. Concerns over security, too, remain an issue for some.

The wide availability of computing power, storage capacity and software over the internet, through ‘the cloud’, presents businesses with the potential to use highly sophisticated software products on a pay-as-you-go basis, removing the pressure of capital investment for hardware and software, as well as taking away the onerous responsibility of maintenance. Smaller businesses now have the ability to access software delivered as a service and use it to gain operational advantage over competitors, both large and small. The opportunity of a level playing field is now available to all.

One of the greatest advantages of the internet is its connectivity—the ease with which it can link businesses together. Orders, acknowledgements and invoices can be easily passed between buyers and suppliers through this medium. Electronic data interchange (EDI) is a natural fit with the internet and the ‘intelligence’ offered by next generation EDI sits comfortably in a cloud environment. However, there are important differences between the requirements of EDI services and the ‘self-service’ nature of the public cloud.

Public cloud services require businesses to use their own staff to set up, input data and maintain services. This may not always be convenient or desirable, and may not be applicable to all IT functions, including EDI.

Connecting buyers and suppliers up to an EDI platform is a sophisticated, complex and arduous task that requires skilled technicians familiar with the many protocols used by business. Outsourcing this function to an EDI provider on a managed service basis removes this issue. Also, by moving to a ‘managed cloud’, compliance with an organisation’s trading requirements becomes a simple matter. If a customer changes their message format, it is the responsibility of the service provider to update the system.

One of the most common barriers to companies moving to a cloud environment is the question of security. Although attitudes are changing fast, companies can be reluctant to place data outside their own firewall. However, for any business that has a network there is always the danger that someone could compromise their systems, and yet few companies are adequately equipped. Cloud computing services have to be more secure than any individual business and leading service providers dedicate considerable resources to maintaining the highest standards on security and virus protection on a 24/7 basis.

Importantly, EDI services are best suited to what may be regarded as a ‘community cloud’—where access is only available to the hub owner and authorised trading partners. An important consideration when adopting a cloud solution is whether each individual customer has their own database, with their data completely separated from other customers’ data. This is key to ensuring that there is no possibility of data getting mixed up or someone getting access to another company’s information.

An often overlooked advantage of moving to the cloud is the creation of a repository of information away from the enterprise. This allows the stored information to be accessed anytime, anywhere. Therefore, if a company’s ERP is unavailable, access via a browser enables business to continue, therefore assisting in the company’s disaster recovery process.

Many major businesses in the retail, manufacturing and building sectors are moving their electronic trading to next generation EDI services hosted in the cloud. Taking an outsourced managed service approach has been seen by a growing number of leading companies as the best way of freeing up internal IT resources, dealing with issues of compliance and facilitating the fast on-boarding of new trading partners. The ‘managed cloud’ is the right place to be for next generation EDI.

Steve Rees is a business consultant at Wesupply.Wesupply provides a fully managed and outsourced electronic business-to-business integration service, using a unique approach that maximises supply chain collaboration between independent organisations. This approach has consistently helped Wesupply’s customers secure tangible operational cost savings along with improved customer service since the business was founded in 1999. Companies across all industries, including retail, CPG, energy and manufacturing rely on Wesupply to manage business-critical information flows for their extended supply chain processes. www.wesupply.com