When the word ‘cloud’ is mentioned you’ll most likely think of remote warehouses full of servers storing huge lakes of enterprise-level data. The cloud has revolutionised commercial data storage, chiefly because it is cost-effective, automatically scalable and businesses can access critical information whenever they want and from any internet-enabled location globally. Cloud is an example of a truly transformative technology bringing benefits across a broad spectrum of industries. For example, tyre replacement firm Kwik-Fit is just one multi-national retailer to harness the power of cloud when it recently switched to an Oracle point of sale solution across its European estate.
However, to think of the cloud purely as a game-changing data dump is to pass over even more powerful applications capable of revolutionising the way data is handled and analysed. Under-utilising cloud technology will also hold businesses back.
Recent research by Cloud Monitor found that companies undergoing digital transformation projects are increasingly turning to the massive processing power of cloud computing to solve the challenges they face and it’s this trend that is causing a big spike in cloud adoption.
Cloud Monitor found that 62 per cent of enterprises use the automatic scalability of cloud to boost IT agility, giving them the opportunity to develop innovative digital solutions and ‘fail fast’, if necessary. Internet of Things adoption accounts for 45 per cent of firms switching to cloud. However, Cloud Monitor predicts the leading factors driving cloud by the end of 2020 will be Artificial Intelligence (AI) and Machine Learning (ML).
For example, as next-generation virtual reality (VR) harnesses the power of cloud-based AI, businesses as diverse as car dealerships and travel companies will find themselves increasingly relying on cloud to convert customers. In the example of car dealerships, German carmaker Audi has already deployed VR in 1,000 of its showrooms, while travel firms such as Virgin use VR to give customers the chance to ‘visit’ destinations from the comfort of its stores.
The huge processing power of cloud computing also offers great opportunities to high-street retailers. Many are now collecting large volumes of customer data along the length of their digitally transformed supply chains. Data analytics and artificial intelligence applications, run on cloud platforms, are able to identify complex patterns in consumers’ behaviour and translate this information into actionable insights in real time. The result is that cloud-powered retailers can now transform their supply chains so that they are truly customer-centric, driven by real-time customer demand rather than retailers’ educated guesses.
Other enterprise benefits of cloud include:
- Higher supply chain visibility: Real-time inventory view is one of the foundational capabilities for any successful omnichannel business. However, companies are struggling to obtain this level of clarity. When a customer buys online and opts to pick up in-store, for example, the e-commerce channel might show availability at the store, but the item might not actually be there. There are two main reasons for this: the POS and inventory systems might not have updated in real time, or the item could be in the store but not in the expected location, perhaps because in-store customers or employees have misplaced it.
- Better merchandising decisions: Travel agents, for example, can analyse sales data and decide what products and services to sell.
- Advanced pricing strategies: Price is a key component in every sector of sales. Big data analytics can easily index, track and analyse the competition’s prices to gain a clear picture of the optimal price point. The travel industry is particularly sensitive to fare and accommodation pricing, for instance. Merchants need to stay aware of competitors’ prices, analyse sales history with high granularity (often at the store level), predict repricing opportunities, analyse margin and sales implications, and translate the results of these analyses into pricing in stores and on the website. Unfortunately, for most merchants this process is mostly manual. Data are frequently distributed across multiple channels with no single source of truth, making insight generation extremely cumbersome and time consuming. Merchants are beginning to work with CIO organisations and analytics leaders inside the company but are hampered by the lack of real-time analytics solutions and by data gaps. In most instances, insights are not timely, and by the time they are converted to pricing decisions and communicated to the stores, the opportunity is lost.
- Personalised customer service: Individual customers’ data can be merged from across sales channels to provide the kinds of actionable insights that make personalised customer experiences possible. German car manufacturer BMW, for instance, recently invested in a cloud-based platform, with advanced AI and ML capabilities, which helps dealerships deliver a personalised customer experience. Personalisation allows CMOs to ensure that the right products are shown to the right customers. Personalisation has a direct correlation to incremental revenue and increased conversion rate. However, retailers are still struggling to get a 360-degree view of the customer, as this requires data reconciliation, attribution across multiple channels, and integrating with partner data sources. Moreover, as product selections and SKUs grow, showing the right set of products becomes more difficult. This increases the risk of losing customers due to incorrect personalisation.
Cloud has some compelling benefits, but that’s not to say there aren’t also challenges. In fact, Cloud Monitor’s research revealed that two-thirds of IT professionals named security as their biggest concern when adopting an enterprise cloud computing strategy. To their credit, however, major cloud vendors have invested heavily in this area, with Microsoft alone investing more than $1billion annually.
So, will businesses run all of their IT workloads from the cloud anytime soon? Cloud Monitor has revealed that one-in-five IT leaders believe it will take ten years to reach the 95 per cent mark, while 13 per cent don’t think we’ll ever achieve that level of cloud adoption.
Whatever your current level of cloud adoption, and whatever sector your company operates in, it is almost guaranteed that you will increasingly rely on this transformative technology in 2020 and beyond.
Roy Reynolds, Technical Director, Vodat