Feb 04
Is the cloud right for your business?

THIS is a fictional story to bring to life the potential change cloud computing represents. Change can be disruptive and unpredictable. Change is opportunity for some. The story is about an events start-up catering firm 'events2′ in London. The narrative describes its inception then later how the business grows, prospers and is then acquired.


Pros of cloud computing

The owners of events2 are ambitious and while they know about IT they rely on others to advise them as to what to specify and buy for the business. There is no money to employ IT staff at this time. A typical scenario for a start-up business where the focus is on providing basic IT support at a low cost while carefully managing cash flow.
The primary focus for the business is sales. IT must support the people who will win the business. Anyone that has begun a business will recognise this situation and know the challenges.
The first priority of a new business is to let its customers know they are open for business so the first thing they do is to establish ways to promote the business and make contact with customers.

As a priority events2 decide they urgently need:

  • A web site
  • email and mobile email
  • A basic accounting package

With no money coming in they realise their start-up funds are rapidly depleting. In fact more quickly than they anticipated. They decide to prioritise remaining funds on outbound marketing.
Being a small business, events2 sales employees work from home and sometimes, from a serviced office. They do not have dedicated desks so they rely heavily upon access to the Internet (fixed and mobile) and use of mobile phones. They visit clients and venue locations so they need to be able to work both offline and online.
To their surprise and delight outbound marketing and the web site are generating enquiries from all over the country.
However visiting perspective customers presents a cash flow and a people resource challenge.
They need a methodology to qualify the interest of these customers and to do it in a professional way without the time and cost of travelling to each customer. They need a solution now otherwise the enquiries will go cold.

As a priority and within hours they need:

A way to present their company, products and service online

The solution online conferencing software. Meetings go well and a number of customers are now confirmed prospects.
To manage customer records the team share a single PC spread sheet. As the customer base grows this increasingly becomes a problematical issue. Two follow-ups with customers are missed and notes about contacts with prospects are not available to everyone. This comes to a head when the CEO of a prospect calls and events2 deputy CEO dealing with the sale is on holiday in New Zealand and not easily contactable.

They need:

A way to record and share all information about sales, prospects and customers.

Back office staff are busy producing product data sheets, price lists, customer proposals, and commercial documents. These are distributed by email so everyone has a copy. Document templates are created and again these are distributed by email. Everyone is busy, consequently communication between staff isn't able to cope with the necessary and frequent document revisions. When the wrong version of a proposal template is used and sent to a prospect the business recognises a problem.

They need:

A way to share documents that is highly accessible yet secure.

Customers like the product service offering consequently more perspective customers are making contact with events2. Many of the requests for information are similar and while events2 enjoy the opportunity to speak to customers it's proving time consuming to handle some requests from people lacking decision/budget authority. They want their public web site to retain a community feel and answer general enquiries in addition they require a restricted access website to store and share customer, supplier contractual documentation.

They need:

A way to create a portal for customers with shared and dedicated partitions.

events2 expand their services range. Repeat customers are asking and expecting discounts. Invitably profit margins suffer. As client instruction volumes grow, administrative response times worsen customers are not accustomed to delays and the number contractual errors increase. The only immediate solution is for staff to work overtime. This is great news but the Sales Order Processing (SOP) team is stressed and some staff resign. events2 are forced to recruit and train new staff however this drains the productivity of experienced staff.
Customers tell them how competitors provide online events booking and they find this more convenient.
events2 also realise they would benefit by automating some of their SOP processes.

They need:

A way for customers to browse and book online with orders automatically routed to SOP workflow.

events2 is now an established business with a trading history to compete for larger contracts. They start contacting large customers to enquiry as to how they could become a supplier. They discover the target group are highly organised. Suppliers are required to be able to transact business electronically (paperless trading) beginning with the order through to payment.

They need:

A way to send and receive electronic documents (orders, invoices) preferably integrated to SOP and Invoicing functions

Their basic accounting system can no longer cope. A decision is made to upgrade to an enterprise resource planning (ERP) system but the cost is frightening. ERP implementation time will take them into the next fiscal year and they really want to upgrade ahead of that time. Part of the issue is that events2 still has no dedicated IT staff. They rely upon ERP vendors and consultants and they are expensive people to hire. events2 can't wait and they need a solution that they can afford.
The ERP hardware and software costs are going to have a major impact on working capital. It is a worrying time.

They need:

A way to implement ERP without major capital cost and do it quickly.

As events2 win business with large customers sales transactions turn into projects and that requires record keeping for time and expenses as some costs are internal and some are invoiced to the customer. events2 is concerned that no system exists and this is a black hole to lose money in.

They need:

A way to organise and run projects and keep time keeping records plus record allocation of expenses to projects.

The business has grown fast and at the current rate of growth they will soon reach hundred employees. One employee asked for a copy of their signed Contract of Employment as their copy had been destroyed in a house fire. They found it, eventually, after a long search. They have a range of benefits for employees but not all employees have the same benefits. They recognise the need to compile these records but they know this will be difficult so they choose to schedule this for a future date. Holiday requests and records are a mess and they are not sure what remaining holiday entitlement some employees have.
The current arrangements for employee reviews are chaotic and some employees do not have recorded performance targets and objectives. They know they have to do better; their employees are an asset to the business.

They need:

An HR system that is accessible to all employees.

Business is profitable and competitors begin to recognise events2 success. Inevitably events2 begins to attract some bid interest. Finally a too good to be true offer is made and events2 goes under due diligence by the bidder. Part of the due diligence involves a review of IT.
IT staff comprises of one person carrying the title, Finance & IT Resources Manager, who is responsible for managing the relationship with IT vendors. He is a qualified chartered accountant with Microsoft Certified Professional certification. He does very little hands on IT maintenance as this is all outsourced.
The bidder remarks that events2 IT assets are small for a business of its size and their IT running costs are low. They also remark how well developed IT is for a business of it size and years of trading. The bidder suggests their low IT costs explains how events2 manage to achieve the above average profit margin for the industry.
Now the bidder negotiates hard on price but events2 stand firm; they have a good business and the foundations for growth. The bidder is secretly impressed with what events2 have achieved with IT. They recognise if they applied events2 IT model to their business this could improve their own business profitability. The bidder sees wisdom in events2 decision to use cloud computing. Adopting cloud computing means the bidder avoids an IT liability. There are no legacy IT systems and associated costs for the bidders business to absorb.
The deal is done and later during a celebration party two employees are talking about their idea for a business and how they could apply Cloud computing to their new business venture.

And the point of the story is?

While this is a fictitious story every aspect of IT described in this story is available in the Cloud TODAY.