Cloud adoption is growing across industries. Organizations that leverage cloud-based tools for procurement have found that the cloud allows for more flexible access and collaboration while helping to decrease costs and make solutions more easily scalable.
Drivers and Benefits of Cloud-Based Procurement
APQC finds organizations are switching to the cloud for the following benefits:
- Enhanced data security and resiliency—Reputable cloud vendors typically provide leading-edge, up-to-date security protection against an evolving cybercrime landscape, instilling a sense of reassurance and confidence in organizations.
- Reduced costs—Cloud-based tools and platforms hand over all maintenance responsibilities—and fees related to licensing and updates—to the cloud provider, making them much more cost-effective than in-house data centers.
- Scalability—Organizations can more easily increase or decrease capacity depending on their needs without having to buy more equipment or remove equipment.
- Reliability—Cloud-based vendors offer greater protection against unexpected outages because they typically have multiple redundant systems in place.
Trade-Offs of Cloud Deployment Models
In considering cloud advantages, organizations must remain cognizant of the risks and tradeoffs involved with different cloud environments when choosing from one of three cloud deployment models:
1. Public cloud—Services are offered by a provider over the public internet; Google, LinkedIn, and Facebook are all examples of public cloud-based services.
2. Private cloud—It only serves a single company and does not provide access for unauthorized uses.
3. Hybrid cloud—It provides a mix of private cloud, public cloud, and on-premises or “edge” infrastructure.
Each of these cloud deployment models comes with its own tradeoffs. For example, the private cloud is the most secure of the three models but is also the least scalable and the least accessible. Even so, an organization might leverage this model because it handles highly sensitive data.
A hybrid cloud model, on the other hand, would allow an organization to handle sensitive or proprietary procurement data on a private cloud while delivering customer-facing applications using shared resources in a public cloud. However, organizations that take this approach will need to ensure compatibility between systems and will grapple with a more complex systems environment. Organizations need to weigh tradeoffs like these and consider their needs as they decide which cloud deployment model is best.
Learn more about the percentage of organizations using the cloud for purchasing vs. on-premise computing in APQC’s Procurement in the Cloud.