Buying Into Cloud: Cloud Technology is Still a Scary Subject, But It's the Future for E-Procurement, Writes Daniel Ball (Sourcing and Procurement) (Cloud Computing‪)‬

The IT industry analyst Gartner recently warned procurement teams against overlooking the risks of moving their organizations to a cloud computing-based IT delivery model. Although that industry's purchasing experts may be being tasked with the decision of whether 'renting' all of your IT requirements as services is viable and cost-effective, they have a similar decision to make in their own departments. e-procurement software is increasingly cloud-based or delivered as an on demand service. What will basing their own automated buying chain and spend management processes on a cloud model mean for them personally in terms of risk and reward? Cloud computing has been both celebrated and derided in recent years but has emerged as a mainstream alternative to companies purchasing, housing, running and managing their own IT assets. At its simplest and broadest, the concept is about using the power of many server computers via a digital network as an alternative to one single physical server. Organizations that are embracing cloud computing completely may only actually need to own the means of accessing the digital network, such as the desktop or mobile hardware that their users have at their disposal and the critical Internet connection. Now, everything else is available for hire. There are many different cloud formations and the term has been used and abused as a catch all for any IT service that is rented rather than owned. As such, we hear the term Applications in the Cloud used when organizations may still choose to own a good proportion of their IT assets but, when valid and specific reasons prevail, they choose to adopt some of their core software applications as a service rather than a physical license. The core benefits of doing this are being able to put IT costs into operational budgets, avoiding large capital outlay whilst reducing the amount of IT resource needed to run and manage software. There's an added bonus of automating the process of software update, so that software investments don't quickly become outdated or expensive to upgrade.