The Hidden Costs of Hosting – Part 2 – Benefits

In part one of this blog series, we discussed the hidden costs of owning an on-premises vs. cloud quality solution. Owning an on-premises quality solution, like owning a pre-owned (used) car, has attached to it a whole host of hidden costs. Direct and indirect costs—these must all be weighed against the benefits received from the system.
 
Your used car might have wear and tear that you just can’t see. Is that automatic transmission near the end of its life? How has the engine been maintained? And what about all the fun stuff nobody thinks about until something goes wrong—like the suspension, timing belt, or brakes? These hidden costs can add up…just like the hidden costs of owning an on-premises quality management solution.
Hidden Costs
So, let’s take a different tack to hopefully motivate you to switch to the cloud before you and your operations are left behind. Here, in part two of our series, we’ll look at why it strategically behooves you to think about shifting (manual transmission pun intended—see blog part one) from an on-premises solution to the cloud. Why should you make the move? There are many benefits to life in the cloud.
 

Strategic Benefits of Moving to the Cloud

Some of the strategic reasons a move to the cloud is a positive experience include:
 
Increased “uptime.” (Understandably, “uptime” is the opposite of “downtime,” or time (which always = $) lost when operations are paused or halted.) The cloud provides greater availability than an on-premises solution. One obvious reason for this is no more upgrades. Instead, cloud technology offers updates; so much more than merely semantic, the cloud enables your users to always have the latest-and-greatest version of the software at their disposal. Whenever the software is improved, everyone benefits.

One of my clients explained how they spent more than two years and well over $250K preparing and completing an upgrade across their 50+ plants. I’d be willing to bet it was well over $250K (because they probably ignored many of the hidden costs I described in part one).

Standardization.  The same client I referenced above had a challenging time with their upgrade because the IT infrastructure necessary to support the system was replicated 50+ times—once for each plant. Those 50+ plants were all using separate databases, installed locally at each plant. They tried to maintain standardization across all 50+ sites, but with separate databases it was virtually impossible. Over time, small changes made in any of the databases led them to diverge more and more from the standardized template from which they began. This made their upgrade very difficult: each database had to be “dissected” first, changes “fixed,” and then upgraded separately—all due to those small changes made over time.
 
Even worse, to prepare a report comparing data across multiple plants was very tedious—requiring extraction of data from each plant into an Excel doc, cleaning up all the differences, before they could even do any comparative analysis. They had a full-time person responsible for this reporting—because, you know, somebody “above” is always asking for some information, and they always need it “yesterday.” 
 
You probably know where I’m heading by now—with a single database in the cloud, with all your plants following the same standardized format, with only the appropriate administrators allowed to make changes—your single standardized solution remains—wait for it—“standardized.” (Cue the applause.) Now think about that same request from “above” for some specific information, a report, some data, and they always want it right away. With a single standardized database, it might only take a few minutes to gather/prepare/identify the data or report needed and send it to them. Think about the impact this has—on both you and those asking for the information. 
 
You don’t waste significant amounts of time trying to pull together the data, getting more irritated and frustrated by the minute. And the person who asked for the information is probably “pleased as punch” you were able to deliver the data within a very reasonable (short) period of time. Yup, it’s a perfect example of the overused “WIN/WIN” comment.
Quality Management from the Cloud
Faster implementation. This significantly reduces the cost of deployment, for obvious reasons—such as virtually eliminating the need to go through the entire IT infrastructure process, from design to approval to procurement to installation. Or improving the consistency of your implementation and streamlining the business practices by creating standardization across the entire operation.  
 
But what about the not so obvious reasons (benefits)?  If the software is going to help solve critical issues, help find the root causes of issues, help reduce production costs, scrap, customer complaints, etc., then what are your lost opportunity costs for each day, week, or month when you are not using the system and generating these benefits?  The faster your people are using the software, the less time you lose, and likely the more money you save. “Hit the ground running” with cloud technology.
 
Risk aversion. There are multiple ways in which the cloud helps with risk. Data backups are automatic. Data is readily available. Reporting is easy and can be enterprise-wide. 

When working for my previous employer, one of our clients was located right by the World Trade Center in NYC and unfortunately lost everything on 9/11. (Tragedy of the events aside) they had fortunately migrated their on-premises system to our cloud solution. As soon as they had new office space, and new computers, they were immediately able to resume operations, without having to re-build their entire business system and database from scratch—because their data was in the cloud, not in their building.

Compliance. With reporting capabilities and accountability available with a cloud system, you can simplify meeting any agency or customer audit requirements, avoid penalties, answer customers’ requests, all in much less time—from anywhere you have access to the internet.  One database, one source—not multiple separate databases (think about my client with 50+ databases!), which you might need to query for your response.
Quality Control on the Shop Floor 
Latest version. As mentioned earlier, SaaS technology offers updates rather than upgrades. Downtime is virtually eliminated, users always have the latest version, and the software is always cutting-edge. That means happier employees and the assurance that you’re using advanced technology. And no more scheduling IT resources to complete an upgrade over the weekend to minimize the interruptions to the operations/business (don’t forget to add the fully-loaded overtime costs for that weekend labor to your “hidden costs” as I described in the first blog).
 
Cybersecurity. Using the cloud means always having the latest security patches immediately and consistently applied across the entire organization (for all users), without having to rely on or burden your IT staff. If a vendor is providing a cloud (SaaS) solution, you know cybersecurity has to be one of their top priorities, if not their top priority. Security can’t be put on the “back burner” ever. Your company is only one of the vendor’s many clients using the system—the security of the system impacts everyone using it, and therefore demands the vendor’s full attention, full-time. Without proper cybersecurity in place, your vendor could find itself in serious trouble, or out of business. 
 
With on-premises systems, your own IT staff is responsible for cybersecurity. Unfortunately, they might be pulled into other “high-priority” projects, which temporarily puts the much-needed upgrade to your own cybersecurity technology on hold—but that brief pause may be too long, and it might then be too late. In just this past year I have had several clients tell me they were hit by a cyber attack and it virtually shut them down for a few weeks. It’s not something to take lightly.
Quality Pros 
Agility. When you reduce your operating costs using cloud technology, that money becomes available for you (ok, maybe for someone else in the company) to do so many other things.
 
Best Practices. The cloud enables you to view your entire enterprise, and from this vantage point you can see what is working well and then spread those “best practices” throughout your organization. Success stories can be shared quickly and have a bigger impact…and much sooner!  You and your bottom line will be glad. As well as the CFO.
 
Scalability. SaaS is pay-as-you-go, meaning during the busier times of the year you can increase the number of subscriptions you use; when things taper off, you can easily decrease them. This helps you optimize your expenditures.
 

Closing

I think it’s clear to see that moving to the cloud has many benefits, from security to compliance to standardization and beyond. But we still need to touch on the all-important topic of cost of ownership. We’ll delve into that in the third, and final, entry to this blog series.
 
Thanks for joining us for part two of this blog series. If you’d like to read (or re-read) the other blogs:  
Take advantage of the technology at your fingertips today: contact one of our account managers (1.800.772.7978 or via our website) for more information.
 
Brad Forrest
By Brad Forrest
Account Manager
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